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NOTEBOOK – ONE GOOD READ: Student loans and entrepreneurship: An overview


The Ewing Marion Kauffman Foundation has published this issue brief on the potential effect of student loan debt on the decision to pursue entrepreneurial ventures. Nearly 1 in 6 adults in the U.S. has outstanding student loan debt and data is suggesting that having student loan debt can indirectly affect the job creation potential of new businesses. A survey of 800 individuals between the ages of 18 and 34 found that among those with student debt who currently own or have plans to own a business, nearly half reported that their student loan payments affected their ability to start a business. Like other forms of debt, student loan debt reduces the personal financial resources available to potential or aspiring entrepreneurs, which could result in starting a business with less capital than necessary, limiting growth or preventing the business from starting altogether. The authors of the brief write that the relationship between student loans and entrepreneurship “isn’t necessarily linear or direct,” and it requires additional research. Continue reading for considerations that can be useful for decision makers who seek to understand and respond to the challenges posed by this relationship.

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