Delayed Dreams: How Student Loan Debt Shapes Family Formation and Homeownership Among Liberal Arts Graduates

This study examines how educational debt burden influences homeownership and family formation outcomes among college graduates, with particular attention to differences between liberal arts and other disciplines. Drawing on data from the College and Beyond II dataset, which tracks long-term outcomes of higher education, the analysis examines how varying levels of student debt burden and debt-to-income ratios affect the likelihood of homeownership, marriage, and having children. Using logistic regression models with a sample of 1,673 college graduates, the findings show that student loan debt significantly reduces the probability of homeownership across all graduates, with even low debt burden associated with approximately 50% lower odds compared to those without loans. The relationship between debt and family formation outcomes is more complex, with low debt burden showing significant negative associations with marriage but high debt burden having inconsistent effects. Liberal arts graduates face additional challenges, showing lower overall rates of homeownership and marriage compared to professional program graduates, though they demonstrate greater resilience to the negative effects of moderate debt burden on marriage decisions. The results highlight how financial constraints early in adulthood can have lasting consequences for major life transitions. These findings reveal that student loan debt operates as a mechanism of social stratification with differential impacts across academic disciplines and racial groups, carrying immediate implications for educational financing policy and institutional support strategies.