

But as the cost of college continues to soar, the debate is taking on a whole new meaning. Is excessive student debt keeping young adults from starting their own businesses?
According to a recent study, the answer is yes. Someone who graduates with $30,000 in student loans is 11 percent less likely to start a business than someone who graduates debt-free, according The Hidden Cost of Financing Education: Can Student Debt Hinder Entrepreneurship? by Karthik Krishnan, an associate professor of finance at Northeastern University.
Currently, over 42 million student loan borrowers have student loan debt of $100,000 or less. The majority (12.4 million) have debt between $10,000 and $25,000; however, more than 2 million student loan borrowers have student loan debt of more than $100,000.
Startup entrepreneurs in their 20s or 30s are less likely to have the responsibilities of a home mortgage, spouse or family to contend with, and in the past, they’d usually have paid off any student loans or other college-related debt by their mid- to late 20s.
Today, of course, the landscape is much different. Many college students are graduating with student loan debt and few prospects for employment that can make any type of meaningful dent in that debt. Where in the past, you could live in your parents’ basement and save your salary to start up your business, today you’re more likely to live in your parents’ basement and put your salary toward paying down college debt.
The irony is that this is occurring at a time when there are more undergraduate and graduate entrepreneurship courses than ever before—all of which could make aspiring small business owners see a college degree as even more essential, despite the cost.
It’s crucial to weigh the costs.
Every case is different, and only you can make the decision. But today more than ever, you need to consider it carefully. SCORE mentors can help you make this choice—and learn lots of things you need to start a business.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.