A new study found that student loans, despite their toxic reputation, helped recipients earn better grades, take more classes and graduate sooner, the Wall Street Journal reported. The study counters a drumbeat of bad news about student debt, which has nearly tripled in the last decade and been blamed for everything from hindering homeownership to damping the willingness to switch jobs or go to graduate school. The five-year research project, which followed 20,000 students at an urban community college, found that taking out loans averaging $4,000 enabled the students to work less and study more while also providing a cushion against emergencies. Student loans don’t need to be paid back while students are still in school. “I think having these resources provides a buffer against unexpected issues,” said Benjamin Marx, an economist of University of Illinois and co-author of the study, to be published today in Education Next, a journal of opinion and research put out by the Harvard University Kennedy School of Government. Marx and his colleague tracked 10,000 students who had been offered student loans via a letter from the school and 10,000 who hadn’t. Students who got offers in their letters were 40 percent more likely to take a loan. Those additional students who got loans earned 3.7 more credits per academic year than they would have if they didn’t take a loan.
