Study: Higher Student Loans Mean Fewer Young Entrepreneurs

Young Invincibles, a research and advocacy non-profit centered on exploring economic opportunity for young adults, released a new brief titled At the Extremes: Student Debt and EntrepreneurshipThe study uncovered four related facts about the state of student loans, entrepreneurs, and their future earnings. Here they are:

Higher Loans Correspond to Lower Entrepreneurship

Higher student loan debt does correspond with lower rates of young adult entrepreneurship. However, not at the highest levels of debt:

“Just over 68 percent of young entrepreneurs took out student loans compared to more than 72 percent of traditionally employed young adults. When young entrepreneurs take out student loans, they are most likely to borrow less than $17,000 but also more likely to borrow more than $59,050.”

Almost Half of Young Entrepreneurs Say Loans Affected Employment

Nearly half of the college-educated entrepreneurs surveyed said that their student debt had affected their future employment plans. Some said they needed to take “less desirable” jobs or one outside their field of study thanks to their debt.

46 percent of those polled said their debt caused “high or very high levels of stress,” while almost 25 percent of the self-employed young adults reported that their “essential expenses” could not be met each month. 16 percent had the benefit of safety nets from their families or friends, who helped pay off loans at rates higher than non-entrepreneur youth.

Young Entrepreneurs Are Diverse

These same young college-educated entrepreneurs are “somewhat more diverse than the Silicon Valley myth would suggest,” the brief notes, adding a series of additional facts:

Most new entrepreneurs are older than 35, and among young entrepreneurs more than half are women and more than a quarter are people of color. At least 45 percent of new businesses don’t have a website and more young entrepreneurs work as artists or personal care professions than in technology. Young entrepreneurs are less likely to come from middle income families than from families with high or low incomes.

Entrepreneurs With Degrees Have Extreme Incomes

Once you get your four-year degree, expect to earn very little or a ton, but not something in between: As the study reports, those polled “are more than three times as likely to have annual incomes below $16,000 than their peers and are more likely than their traditionally employed peers to earn more than $76,000.”

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Adam is a writer at and has worked as a tech writer, blogger and copy editor for more than a decade. He was a Forbes Contributor on the publishing industry, for which he was named a Digital Book World 2018 award finalist. His work has appeared in publications including Popular Mechanics and IDG Connect, and his art history book on 1970s sci-fi, 'Worlds Beyond Time,' is out from Abrams Books in July 2023. In the meantime, he's hunting down the latest news on VPNs, POS systems, and the future of tech.
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