Michaela Go
English 10100
Professor Creaney
October 28th, 2019
How Does Student Debt Affect the Future of Students?
Due to an increase in college tuition, many students now depend on loans to fund their college education. Feelings of concern and worry rise as the amount of student debt has gone up across the whole nation. It is without a doubt that student loans make it possible for many to attend school and pursue their careers. However, after a student has graduated their student debt may have an impact on what comes next. In this inquiry based research essay we will be exploring the question “How Does Student Debt Affect the Future of Students?”.
Student debt, though it has helped many students complete their college education, has earned an infamous reputation. It has become known for becoming a burden to students. Throughout the years, public and private institutions have been raising their tuition making it a norm for students to apply for student loans. From an academic journal by Oscar Solis and Ralph Ferguson titled “The Relationship of Student Loan and Credit Card Debt on Financial Satisfaction of College Students”, they stated that in a five year span from 2007 to 2012 there has been a 65% increase in financial aid applications. According to Solis and Ferguson, having great debt can lead a student to have dissatisfaction in their financial status. It may cause students to become insecure and uncertain if they can pay off their debt. In an article titled “How Student-Loan Debt Affects the Rest of Your Life (It’s Not Pretty)” by Andrew Keshner, Keshner looks at the statistics from survey done by Student Debt Crisis which is a non-profit organization and by Summer a start-up. Both groups aim to assist students in figuring out a plan in which they will be able to pay back their student loans. The survey they conducted was called “Buried in Debt”. Keshner exposes to the readers just how drastic a students life can be affected by their debt. Ever since we were little kids we’ve always dreamed of what we want our lives to be after college. We would be married with children, living in a house that we designed ourselves. Student debt can delay major purchases that a student planned to make for example their first house, their car, or even saving up for their retirement. According to Keshners article, in the survey 56% of their participants were unable to purchase a home and “80% of participants… said their student-debt obligations prevented them from saving for retirement”. A majority of the participants have put off investing in their desires to pay off their student debt. Their debt has become a burden, hindering students from getting what they’ve always dreamed of.
Diana Hembree introduces to us the story of Sean Vaillancourt in her article called “New Report Finds Student Debt Burden Has ‘Disastrous Domino Effect’ On Millions Of Americans”. Sean Vaillancourt says that student debt that forced him and his wife to put their lives on hold year after year (Hembree). Vaillancourt and his wife have been putting all their earnings into paying back his student debt. According to Hembree, this has been the case for Vaillancourt and his wife for almost 10 years of their lives. Sean Vallaincourt was one of the 7,095 student loan borrowers that participated in the “Buried in Debt” survey. The survey examines the “unrelenting stress and financial strain” on borrowers caused by the incredibly high monthly payments (Hembree). The survey done by SDC and Summer reported that some borrowers have even considered the idea of suicide not only from the pressure of paying back their debt but form the lack of help and guidance that is being offered to the borrowers. Many students have become victims to the “predatory practices” practiced by their loan services (Hembree). Loan services would give the students advice that wouldn’t really make sense or plans that would trap the student into paying more than they borrowed. For example, another participant in the survey named Melissa Mills reported that she has begged Sallie Mae, a service that offers student loans, to lower her monthly payment. Instead of lowering her monthly payments, Mills says that all they told her was “to quit my job and find a better-paying one” (Hembree). Debt has caused many students to delay major purchases that should’ve been their priority. Student debt can leave students in a troubling situation. A situation where they are constantly worrying and putting their plans to the side in order to get rid of their debt.
We have examined the effects of student debt in terms of their investments outside of academics. This raises the question of how student debt affect the students future in pursuing education after graduating with a bachelor’s degree. Many studies have been conducted to determine the effects of debt on a students desire to pursue higher education after graduation. In an academic article published by Taylor and Francis Ltd titled “Graduates’ Ball and Chain: Does the Burden of Debt Limit Choices?” it is said that debt has no effect on a students desire to pursue further education. The article examines a study conducted by William Weiler that uses data from High School and Beyond (HS&B). William Weiler found that in the study debt had little to no effect in influencing a student to continue their education. Similar data was found when Morton Shapiro, Michael O’Malley and Larry Litten analyzed data from the Senior Survey from the Consortium on the Finance of Higher Education (COFHE). Litten, O’Malley and Shapiro found that while student debt had an insignificant role, factors like ethnicity, gender, and age played bigger roles in a student’s choice to pursue “post baccalaureate decisions” (Taylor and Francis Ltd). Even with student debt on their shoulders, students would still continue to apply for and attend Graduate School, Law School, Medical School, etc.
Throughout all the sources utilized in this paper, we can see them referring to the same surveys and studies. I have found that within the surveys and studies used, there were some limitations or factors that may have caused inconsistency in conclusions. In an academic journal titled “How Undergraduate Loan Debt Affects Application and Enrollment in Graduate or First Professional School” by Catherine Millet, she states that after years and years of trying to find an answer researchers “have not reached a consensus” on whether student debt has a direct effect on a students future. Researchers who have conducted their own studies have found a variety of answers. Some studies find that student debt has a significant role in a student’s choice to pursue higher education and some find that student debt has no effect at all. What causes researchers to reach different conclusions? Many of the studies used were not conducted to answer the question of how does student debt affect a students future. For example, a survey done by “High School and Beyond” its purpose was to examine the issues faced by students as they transition from high school (Millet). A majority of the demographic of the survey by “High School and Beyond” were recent graduates of high school and not recent graduates of college. In a survey called “Senior Survey” conducted by the Consortium on the Finance of Higher Education (COFHE), they were able to get the right demographic but failed to conclude what life after graduation was like for college graduates (Millet). Surveys used in my sources, didn’t have great representation of college students across the nation. For example, the Higher Education Data Sharing (HEDS) Consortium administered their survey only to those who attended at private institutions (Millet). Lack of representation in college graduates from around the nation can lead to inaccuracy in results. Yesuel Choi, in his academic journal titled “Debt and College Students’ Life Transitions: The Effect of Educational Debt on Career Choice in America”, gives us 5 factors to investigate thoroughly in order to get sufficient conclusions. The five factors are: “1) new data sets, 2) psychological variables associated with career choice, 3) methods, 4) a specific group, such as minorities, lower class families, and women, and 5) the characteristics of loan programs” (Choi) . The problem is that the surveys already conducted only helped us find half the answers we needed. If we consider the five factors listed by Choi, we will be able to see if student debt has an effect on a students future. By being more specific in our question, target group, and methods we have more chances to have great representation and come to an accurate conclusion.
Student debt has a great impact on the personal lives of students but not so much in their academic life. Their debt has become an extra burden that causes them stress and trouble. In an online article by Walter Myers called “The Effect of Student Loans on your Future: What to Know Before Applying for Financial Aid”, he states that one in five borrowers don’t understand the terms and conditions from their loan providers. Myers believes that borrowers are given an insufficient education on how loans really work. It is more than just the provider giving you money and you paying it back. Myers believes that the Government along with the schools themselves should be more involved in solving the student debt crisis. He believes that students are not given enough guidance or information on how student loans work. Myers also says that insufficient guidance with student loans can result in students dropping out or forcing them to change their career path. He believes that can be avoided if the schools and government “intervene earlier”. Students facing the effects of their debt can avoid having such a big burden by conducting research to fully understand how student loans work. Joe Mihalic was interviewed by Mint in an interview called “Expert Interview with Joe Mihalic on Paying Off Student Loan Debt for Mint”. Mihalic was not one who had a student debt horror story. He felt the same fear, and anxiety any student would get when paying off their debt but he mentions that he was mostly excited. In his words, he said he felt like a “trailblazer” or like someone who was clearing a new path (Mint). Mihalic says in his interview that he never took out more than what he needed, and this made it easier for him to pay back his debt. Some students would take advantage of the loans and take more money than needed, and this soon will hit them hard in the future. In order to avoid the trouble that comes with student debt, I invite future and current students to do first educate themselves in student loans. Look for people who can guide you and help you determine if loans are the way to go. Then, I advise them to use the money wisely. It is easy to get excited and spend the money on things other than school, but don’t be tempted and use it on what you need and not what you want
After analyzing the sources I have utilized, I have come to the conclusion that student debt has a definite impact on a student’s personal life such as their investments, their financial status, their financial insecurity, their love life, and their future family. It is still too early to tell if student debt affects a student’s choice to further their college education because surveys and studies have not reached one consensus. However, if they followed the five factors listed by Yeseul Choi we would be moving in the right direction to reach accuracy in data. Having representation of all graduating groups and having the same objective would help us reach a consistent answer. Although there will always be trouble with student debt, greater hardships can be avoided if enough research has been done and if guidance has been given. Student debt has a direct impact on a student’s personal life, but we still have reached no consensus on whether it impacts their academic life.
Works Cited:
Choi, Yeseul. “Debt and College Students’ Life Transitions: The Effect of Educational Debt on Career Choice in America.” Journal of Student Financial Aid, National Association of Student Financial Aid Administrators. 1101 Connecticut Avenue NW Suite 1100, Washington, DC 20036. Tel: 202-785-0453; Fax: 202-785-1487; e-Mail: Membership@Nasfaa.org; Web Site: Http://Www.nasfaa.org, 30 Nov. 2013, eric.ed.gov/?id=EJ1034693.
Hembree, Diana. “New Report Finds Student Debt Burden Has ‘Disastrous Domino Effect’ On Millions Of Americans.” Forbes, Forbes Magazine, 1 Nov. 2018, www.forbes.com/sites/dianahembree/2018/11/01/new-report-finds-student-debt-burden-has-disastrous-domino-effect-on-millions-of-americans/#1a6bd62612d1.
Keshner, Andrew. “How Student-Loan Debt Affects the Rest of Your Life (It’s Not Pretty).” MarketWatch, 20 Nov. 2018, https://www.marketwatch.com/story/what-student-debt-does-to-people-its-not-pretty-2018-11-14
.Millett, Catherine M.”How undergraduate loan debt affects application and enrollment in graduate or first professional school.” The Free Library 01 July 2003. 26 October 2019 <https://www.thefreelibrary.com/How undergraduate loan debt affects application and enrollment in …-a0105553556>.
Mint, Intuit. “Expert Interview with Joe Mihalic on Paying Off Student Loan Debt for Mint.” Mint, 16 Dec. 2014, https://www.mint.com/personal-finance-interviews/expert-interview-with-joe-mihalic-on-paying-off-student-loan-debt-for-mint.
“The Landscape: Graduates’ Ball and Chain: Does the Burden of Debt Limit Choices?” Change: The Magazine of Higher Learning, vol. 27, no. 2, 4 Jan. 1995, pp. 55–58., doi:10.1080/00091383.1995.9937739.
Myers III, Walter Myers. “The Effect of Student Loans on Your Future: What to Know before Applying for Financial Aid.” NBCNews.com, NBCUniversal News Group, 28 Jan. 2019,www.nbcnews.com/think/opinion/applying-financial-aid-student-loans-are-mortgage-your-future-no-ncna944971.
Solis, Oscar, and Ralph Ferguson. “The Relationship of Student Loan and Credit Card Debt on Financial Satisfaction of College Students.” The Free Library, 1 Sept. 2017, www.thefreelibrary.com/The+relationship+of+student+loan+and+credit+card+debt+on+financial…-a0507012086
