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ERIC Number: ED559336
Record Type: Non-Journal
Publication Date: 2015-Jan
Pages: 32
Abstractor: ERIC
Reference Count: 9
Does Increasing Reliance on Student Debt Explain Declines in Entrepreneurial Activity? Posing the Question, Gathering Evidence, Considering Policy Options. Research Report
Baum, Sandy
Urban Institute
In recent years, concerns have emerged both about declines in entrepreneurial activity, and about increases in the amount students borrow to finance postsecondary education--in the aggregate as well as on average. Because the financial obligations associated with student debt could limit access to credit for individuals seeking to start businesses, and reduce the amount of financial risk college graduates are willing to take, the possibility of a causal relationship between student debt and the business start-up rate deserves attention. Experts on entrepreneurship and experts on student debt met at a conference in September, 2014, to discuss the idea that the increasing prevalence of student debt among recent college graduates might be preventing a significant number of people who are interested in starting new businesses from doing so. The conference aimed to bring together the knowledge and analytical perspectives of the two groups to consider what we know and what a rigorous research agenda might teach us about a causal relationship between these two phenomena. This paper summarizes some of the insights from that discussion and considers constructive directions for future inquiries into the issue. A central consideration is where a research agenda might lead. If a causal relationship between student debt and entrepreneurial activity were to emerge with evidence that a significant number of potentially successful entrepreneurs were discouraged by their debt obligations, what remedies would be available and desirable? The best strategies for addressing the problem would probably lie in helping individuals with entrepreneurial ambitions deal with their student debt rather than in attempting to solve the larger and less tractable problem of finding the optimal system for financing postsecondary education. The policies likely to emerge are probably constructive components of efforts to encourage entrepreneurship--whether or not student debt is a significant driver of recent trends in this activity. The following is appended: Urban Institute Conference Participants.
Urban Institute. 2100 M Street NW, Washington, DC 20037. Tel: 202-261-5687; Fax: 202-467-5775; Web site:
Publication Type: Reports - Research
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: Ewing Marion Kauffman Foundation
Authoring Institution: Urban Institute