On Campus: UW Study On College Debt Finds 'Middle-Income Squeeze'

Ann McClure's picture
Tuesday, August 21, 2012

College costs keep rising. More students pile on student loan debt to get through. It's a much-chronicled story in higher education.

But a new study by UW-Madison professor Jason Houle reveals surprising findings about who gets soaked the most by these trends. It's not the poor. Or the rich. It's the middle class.

On average, students from middle-income families leave college with $6,000 more in loan debt than their peers from poor families. Compared with higher income peers, the difference is even greater: middle-class students rack up $12,000 more.

Houle calls it the "middle-income squeeze." Students in that group often qualify for less financial aid than poor students, meaning their families have to pony up more of college costs themselves. And, in contrast to wealthier students, their families are less able to do so — they have lower incomes and are less likely to have saved in advance — especially as college costs have risen dramatically. So they take out more, and bigger, loans.

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