Educational Debt and Material Hardship: The Role of Disability

Abstract

In 2020, student loan debt in the United States totaled $1.55 trillion. Policy proposals to address the high level of debt have ranged from incremental approaches, such as legislative proposals to forgive up to $10,000 of debt for individuals, to sweeping proposals that would cancel all debt through executive action by the President. Several aspects of the student loan policy debate touch on the disabled population in the United States, especially individuals who receive benefits from the Social Security Administration. In this study, I use new data from the 2018 Survey of Income and Program Participation to examine the characteristics of Social Security and Supplemental Security Income disability beneficiaries with educational debt and compare their characteristics to disability beneficiaries without debt and to the broader population in the United States. Material hardship is widespread among disability beneficiaries, especially among those with educational debt. Hardship is less common among persons without a disability, even among those with educational debt. I apply these results to inform policy debates on educational debt, with a particular focus on the issue of targeting loan forgiveness to individuals with limited economic means.