The Impact of Student Debt on High Value Entrepreneurship and Venture Success

59 Pages Posted: 25 Sep 2018 Last revised: 24 Sep 2019

See all articles by Karthik Krishnan

Karthik Krishnan

Northeastern University

Pinshuo Wang

University of South Florida

Date Written: October 14, 2018


We find that graduates from universities that remove student loans from their financial aid policies are more likely to start entrepreneurial ventures and are more likely to subsequently get venture capital (VC) backing, particularly by reputed VCs, and get higher VC investment. Such ventures have higher sales and employment five years after founding. Our results are stronger for universities with higher tuition and greater extent of R&D activity. Overall, our results document a significant adverse effect of student loans on a crucial engine of economic growth - high impact, venture capital backed startups.

Keywords: entrepreneurship, venture capital, student debt, financial aid policy

Suggested Citation

Krishnan, Karthik and Wang, Pinshuo, The Impact of Student Debt on High Value Entrepreneurship and Venture Success (October 14, 2018). Available at SSRN: or

Karthik Krishnan

Northeastern University ( email )

360 Huntington Avenue
414C Hayden Hall
Boston, MA 02115
United States
617-373-4707 (Phone)


Pinshuo Wang (Contact Author)

University of South Florida ( email )

4202 East Fowler Avenue, BSN3129
Tampa, FL 33620
United States


Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics