"What's the counterfactual?" asks Sue Dynarski of student loans

May 16, 2014

In a May 15 Chronicle of Higher Education article, Beckie Supiano explores the tricky question of how student loans affect long-term financial well-being. "Paying off student loans is a fact of life for a growing number of American households," writes Supiano. "So it's important to understand how student debt matters in borrowers' financial lives."

Even recent analyses, however, fall short of answering this question because those with loans, and those without loans, differ in important ways. "Whenever student-loan borrowers are compared to people without debt, there's a crucial question," writes Supiano. "What is the counterfactual?," asks Susan Dynarski, professor of public policy and education. What would student loan borrowers look like in the absence of that debt? Would they have emerged from college debt-free? Or would they have failed to earn a degree in the first place?

Susan Dynarski is a professor of public policy at the Gerald R. Ford School of Public Policy, and a professor of education at the University of Michigan's School of Education. She is co-founder of the Education Policy Initiative, which engages in applied, policy-relevant education research designed to improve overall educational achievement and outcomes.