More than half of bachelor degree owners from the Great Recession era owned homes in 2018, the report shows

Ten years after earning their bachelor’s degree, 86 percent of graduates had a retirement account, and 63 percent owned a home, according to a new report from the National Center for Education Statistics.

Despite the frequently accepted assumption of well-educated but indebted millennia can not afford to buy home, the new NCES report paints a different picture. This picture may reflect more in the housing market than in higher education, but economists said the new data is a good sign for colleges and universities that may be concerned that bachelor’s degrees provide less value to graduates during a recession.

“I think what we’re seeing here is that even though the Great Recession was driven somewhat by a financial bubble and something associated with the housing bubble, interest rates have only been at an all-time low,” said Jeff Strohl, research director at Georgetown University Center for Education and the Workforce. “It could be a big, important factor.”

The new report is part of a longitudinal study examining financial and career outcomes for a group of graduates who received bachelor’s degrees during the academic year 2007-08 and entered the workforce at the beginning of the Great Recession. More than 137,000 students were surveyed for NCES’s National Postsecondary Student Aid Study, and 17,100 of these students were eligible to be included in the new longitudinal study. These students represent approx. 1.6 million students who completed a bachelor’s degree between July 1, 2007 and June 30, 2008, according to the report.

In the decade following their graduation, bachelor degree holders in 2007-08 averaged 85 percent of the months, unemployed for 7 percent of the months, and out of workforce for 9 percent of the months. Among those who were part of the workforce in 2018, about 85 percent had full-time jobs. More than 90 percent of the employed men and 81 percent of the employed women worked full-time jobs in 2018.

The results of the study reveal that candidates during the Great Recession are roughly on par with candidates from other non-recession years, Strohl said.

“These numbers pretty much live up to the historical norm,” Strohl said. “I think the recession just wasn’t that hard hit [bachelor’s degree-holding] part of the population. “

To assess exactly how the Great Recession affected these graduates’ careers and economic lives, the cohort must be compared to a control group of candidates who did not enter the workforce during a recession, said Till von Wachter, professor of economics at the University of California, Los Angeles. Angeles.

I have studied similar comparisons ia 2019 paperto find that people who graduate during a recession typically catch up with others who did not graduate during a recession within 10 years, the same time frame used in the new NCES report.

“While participants in major recessions had lower entry wages due to the Great Recession, they also faced an increasingly positive labor market, which probably helped their recovery process,” von Wachter wrote in an email.

The results of the new report may be good news for recent graduates entering the workforce during the current economic downturn caused by the ongoing pandemic. By and large, bachelor degree holders have not lost jobs during the pandemic at the same rate as high school graduates and workers in the service industry. Despite a “scary as hell” initial job market, today’s graduates are likely to be OK in the long run, Strohl from Georgetown said.

“If the experience we see here is indicative, they will land on their feet,” he said.

Von Wachter still wonders whether the long-term effects of entering the workforce during a severe recession remain unclear.

“Although the recovery in earnings appears to be complete after 10 years, when we looked at graduates from the last major recession, in 1982, we found that they suffered from increased mortality and poorer family outcomes in the 1940s,” von said. Wachter. “The 10-year mark may not be sufficient to assess the long-term results.”

Not all 2007-08 NCES survey candidates did well at the 10-year check-in. In 2018, nearly 14 percent of candidates reported that they could not pay significant expenses – such as mortgage or rent, bills or medical treatment – within the last year. About 9 percent of science, technology, engineering, and math studies reported not being able to incur significant expenses compared to 15 percent of non-STEM majors.

One in five 2007-08 candidates had a negative net worth in 2018, according to the report. The report considered candidates to have a negative net worth if they would still be in debt after selling major assets, including a home, turning investments and assets into cash and paying off as much debt as possible.

Of the graduates who still paid student loans in 2018, public college graduates paid at least a month and put an average of $ 393 into loans. Graduates from private nonprofit colleges paid an average of $ 469 against monthly loan payments, and graduates from private for-profit colleges paid an average of $ 485 per month. Month.

Home ownership varies by race and other findings

Home ownership varied by race and ethnicity. About two-thirds of white graduates in the 2007-08 undergraduate program owned a home in 2018, compared with 47 percent of black graduates, about 52 percent of Spanish or Latino graduates, and 53 percent of Asian graduates.

About 60 percent of 2007-08 graduates who enrolled in an additional degree program after completing their undergraduate degree owned homes in 2018. About two-thirds of graduates who did not pursue an additional degree-owned home in 2018.

Graduates from 2007-08 who were married, with or without children, were approx. twice as likely to own a home in 2018 than 2007-08 graduates who were not married.

Among graduates in the program, 43 percent earned another degree or certificate in 2018. More than a quarter of graduates from 2007-08 had earned a master’s degree; 6 percent completed a bachelor’s degree, associate’s degree or additional bachelor’s degree 5 percent earned a professional or other doctoral degree; 4 percent completed a post-bachelor’s or post-master’s certificate; and 2 percent completed an academic doctorate.

In 2018, a quarter of graduates from private vocational colleges were unable to incur significant expenses in the last 12 months compared to 13.2 percent of public college graduates and 12.6 percent of private nonprofit college graduates.

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