He analyzed four hypothetical scenerious to determine lifetime disposable income of 18-year olds:

1)      One who borrows $30,000 a year to attend a four-year college.
2)      One who borrows $15,000 a year for four years.
3)      One who graduates debt-free.
4)      A high school graduate.

Student Loan Debt

What Kotlikoff found:

Using the starting salary of $45,000, all the college graduates ended up with more disposable income than workers with just a high school diploma. (This study does not include those who went to a tech school or obtained an associate’s degree or apprenticeship somewhere.)

The college graduate who borrowed only $15,000 a year ended up with 4.4% more spending money than the one who borrowed $30,000 a year.  (Obviously, the more you borrow the more you will pay back-with interest.)

The college graduate who graduated debt-free had nearly 9% more disposable income than the one who borrowed $30,000 a year. (Wouldn’t it be nice if everyone had access to a free education or at least a rich grandparent?)

But get THIS…

If the heavy borrower earned the same median income as a high school graduate immediately after college, which is $28,000, the graduate’s spending power would be 16% lower than that of the high school graduate!

Kotlikoff’s final conclusion…

Because it’s nearly impossible for a borrower to discharge student loans through bankruptcy, the debt just keeps accumulating –even if the borrow can’t make payments. “It’s like a debtor’s prison for life,” he says.