Why Some College Students Don’t Give Back

College students with significant financial aid in the form of loans, it turns out, aren’t so generous toward their alma maters. As alumni they’re unlikely to give back, and when they do they give smaller amounts. This isn’t, as one might suspect, because they can’t afford too; it appears to be because the loans just make them annoyed at their institutions.

According to a paper by Jonathan Meer and Harvey Rosen:

The mere fact of taking out a student loan decreases the probability that an individual will contribute to the university as an alumnus. Further, individuals who take out large student loans make smaller contributions as alumni, conditional on making a gift. Taking advantage of correlates of income that are in our data set, we argue that this negative impact is unlikely to be due to the fact that alumni who took out loans have relatively low disposable incomes.

The researchers investigated students receiving scholarships, loans, or campus jobs as a form of financial aid. They discovered that, while receiving any kind of financial aid reduced alumni giving (which is to be expected) it was student loans that reduced alumni contributions the most.

This is, the researchers explained, unlikely to be due to the fact that financial aid recipients in general might have less money. As the writers point out, contributions don’t seem to depend on graduates actual disposable income; the graduates with loans don’t contribute more money after they’re been out longer and have presumably paid off their debt.

Why is this? Well the researches don’t really know the answer, but they’ve got an idea:

A final possibility is that there is an “annoyance effect” associated with having to pay back loans. Given that the results do not seem to be driven by income or ties to the majority social culture, it is difficult to put forward an explanation other than this psychological burden, mentioned above. That is, loan recipients resent the fact that their aid came in the form of loans rather than grants, and consequently, give less….

Makes sense.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer