Dreams vs. Student Loan Debt

Most people attend college and university for a similar reason. Potential students want to prepare for a career that will improve their future and positively impact the world.

However, new evidence shows that attending college – and the subsequent student loan debt that comes with – is making graduates ditch their dreams.

Drowning in debt

More than half of borrowers who owe $55,000 or more in student debt say they took a job outside of their field, according to new research by SavingforCollege.com. This is almost double the amount of those with no student loan debt (29% of survey participants) who took a non-degree related job.

“It’s absolutely ironic,” said Mark Kantrowitz, publisher of SavingsforCollege, to CNBC. “You go to a more expensive college, supposedly the best in your field, but take on too much debt, so you can’t work in your field because of the need to repay the debt.”

Many other studies and research point to a similar phenomenon.

For example, 30% of respondents agreed that “my need to pay student loan debt hampered/is hampering my ability to further my career,” according to a study by American Student Assistance. Additionally, 17% of respondents strongly agreed with the statement “My need to pay student loan debt hampered/is hampering my ability to further my career.”

Rising higher education costs

The amount of graduates who are seeking any type of employment after school is directly linked to two factors. The first factor is the rising cost of higher education in the United States. The second factor is the subsequent student loan debt that comes attached to a pricey college education.

“A four-year stint at a private American university today—for example, Harvard, Stanford, or Yale—costs more than a quarter-million dollars, including tuition, lodging, and books,” writes Ephrat Livni for Quartz. “Public universities may be more affordable, but the outlay for an education still requires funding assistance. University of California schools, for example, costs about $12,500 a year just for tuition and fees for a full-time state resident. Assuming students stay close to home and commute, that still amounts to $50,000 for an undergraduate degree. Given this the prohibitive pricing, many students have to borrow this money.”

Simply put? When graduating with so much student loan debt, new workers don’t have the option to be choosy about employment. New workers need a job – any job – that will allow them to pay down their monthly student loan payment.

Deferring other dreams

It’s important to note that the student loan debt crisis is not only affecting employment choices post-graduation. An alarming amount of borrowers also report putting off other dreams in order to deal with their debt. Some of the most common life goals that are deferred for those with student loan debt?

  • Marriage
  • Buying a home
  • Having children
  • Buying a car
  • Donating to charities or philanthropic causes

According to “Buried in Debt,” a national survey report on the state of student loan borrowers in 2018, student loan debt affected respondents in the following ways:

  • 19% have delayed getting married due to student debt
  • 26% have put off having children
  • 56% have not been able to buy a home
  • 42% have not been able to purchase a car
  • 50% have not been able to contribute to a charity

Future issues

Researchers also worry that student loan debt will continue to hurt individuals and the overall U.S. economy.

“It is unfortunate that perhaps debt is making it hard for people to take jobs that have low pay but high nonmonetary returns, such as those in public service,” wrote Nicolas Ziebarth, co-author of “Life After Debt: Post-Graduation Consequences of Federal Student Loans.”

What do you think?

Now, we want to hear from you. Has your student loan debt affected your employment choices? Or has your student loan debt affected your pursuit of other life dreams?

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