A study recently published in the journal Children and Youth Services Review revealed that student loan debt can negatively impact a borrower’s ability to gain assets after leaving college. After leaving school, either by dropping out or graduating, people with unpaid student loan debt on average have a lower net worth and fewer financial assets at the age of 30.

Min Zhan is a professor of social work at the University of Illinois and the principal investigator in the study. She says that the results of this study highlight the need for access to different ways of paying for college, aside from just student loans and various forms of credit.

Researchers found that there is an even larger negative impact on black young adults as their net worth is 40 percent lower than white students.

This study looked at four different areas of wealth accumulation including total net worth; financial assets like savings, stocks, and mutual funds; non-financial assets like homes or vehicles, and the value of a borrower’s living residence.

Researchers surveyed over 1,200 people, 626 with outstanding loan debt and 581 with no education loans. All the participants had at least a year of college experience and all were born between 1980 and 1984.

45 percent of participants left school before earning their degree, 39 percent earned a bachelor’s degree, 11 percent earned a 2-year associate’s degree, and 5 percent earned a master’s degree or higher. Among participants, that average student loan debt was $15,200.

For borrowers who had graduated or dropped out of school, the average net worth was $13,680 lower than their peers who did not leave school with student loan debt. They also had $39,630 less in financial assets and $12,670 less in non-financial assets.

Researchers also found an association between student loan debt and lower home values. 39 percent of participants were homeowners at age 30 and the average home value of borrowers was $103,000 less than their peers who had no student loans.

The study also suggested that student loan debt can be a barrier to long-term wealth building as well. It can also exacerbate wealth inequality along racial lines as well.

Black young adults were found to be more likely to have student loans after college and their debt-to-income ratios were greater than white young adults.

Zahn states that even in light of these findings, a college degree is an important investment, as the values on all four measures of wealth were higher for borrowers who had earned their degree. Zhan points out that although the burden of student loan debt can lengthen the process, a college degree still remains an important asset for young adults who are trying to build wealth.

Researchers also found that the economic status of parents and access to health insurance are valuable predictors of wealth accumulation as well.