Introduction
The problem of student loan debt should be discussed for two reasons: firstly, the ability to get higher education has an impact on the person’s future financial and social status, and this ability depends on the cost of education. Secondly, having debt may be detrimental to the person’s mental wellbeing and their ability to focus on their studies. The student debt in America is typically a serious burden for students. According to the National Center of Educational Statistics (2020), between 2016 and 2017, on average, students gaining different degrees had loans ranging from $16,500 to $43,000, and 68% of students applied for federal loans to finance their studies. Apart from the money needed as a direct payment deposited to the education institution, these individuals also must pay for study materials, housing, food, and other expenses. Moreover, students enrolled in full-time studies in most cases cannot dedicate time to work as their programs imply that all their free time will be spent on preparing for classes. The six articles examined in this paper will help clarify the issue of student loan debt, the impact it on the learners, and whether any policy changes are needed to relieve students of this burden.
Annotated Bibliography
Addo, F.R., Houle, J.N. & Sassler, S. (2019). The changing nature of the association between student loan debt and marital behavior in young adulthood. Journal of Family Economic Issues 40, 86–101. Web.
Addo et al. (2019) discuss the results of their cohort study of the correlations between student dept and individuals’ behaviors. Hence, this is quantitative research based on the data from NLSY 1979 and the NLSY 1997. Mainly, the researchers focused on whether student loans affect the individual’s intentions to marry. Therefore, this research helps understand the exact impact that student loan burden has on people’s social behavior, more specifically their intentions to marry and establish a family.
The main limitation of this article is that the data used by the authors is not recent. Arguably, the social perceptions of marriage and the acceptability of cohabiting without being married increased, which limits the applicability of the findings in the modern-day context. Still, this article contributes to a better understanding of how loans and widespread student debt affects other aspects of people’s lives, especially those that play an important role in society.
The findings of this research suggest a difference between the two cohorts since men who responded to a 1997 survey were less inclined to marry when compared to the 1979 respondents. However, cohabiting attitudes have changed as well, and more young individuals from the 1997 cohort report to prefer cohabiting as opposed to marriage. Primarily, marriage intentions during 1979 were affected by the presence of student debt, but these attitudes changed in 1997.
Krabbe, M.S. (2020). The price of higher education: Experiences of American student loan borrowers. Research in Economic Anthropology, 40, 109-123.
Krabbe (2020) offers a case study depicting the experience of the students borrowing money from the government to fund their studies and how this experience affects their lives. Moreover, the author specifically interviews people living in Wisconsin, which also places some limitations on the type of dept and perceptions towards it. Still, Krabbe’s (2020) article is important because the amount of student debt is increasing.
One limitation of this study is the design since a case study has very limited generalizability. Therefore, while this text offers some valuable insights for understanding the exact experiences, the issues that other students face when having to loan money may differ. These findings cannot be used for policy development, but they can have researchers understand the different sides of this problem and refine their research questions.
The conclusions by Krabbe (2020) suggest that student loan debt is no longer perceived as problematic by students. The findings suggest that since student debt has become more common, it is now perceived by most as an integral part of life or a necessity required to have an education and a decent job. Hence, policies should not focus on reducing the burden of this debt but rather should support the students and provide them more opportunities.
Mueller, H., & Yannelis, C. (2019). The rise in student loan defaults. Journal of Financial Economics, 131(1), 1-19.
Muellyer and Yannelis (2017) use quantitative methods and correlational design to statistically analyze the increase of student debt since the Great Recession. The topic of this research study is the assessment of the changes in the nature of student debt and the factors that impacted these changes. The authors used quantitative methods, such as Blinder-Oaxaca decomposition, which is linear regression analysis. The authors used a sample of 4% of the student loan data from the US Department of the treasury.
The limitation is that the authors focus primarily on the analysis of data from the Great Recession, which allows making some conclusions about the correlation between the global economy and the depth of the student loan problem. The author chooses to study the issue of student loans after the Great Depression because many loans defaulted at that time, which burdened the government since 92% of these borrowings are provided by the state (Muellyer & Yannelis, 2017). However, this research helps understand the breadth of the student debt issue since the amount of loans and their total sum has continuously increased over the years.
Mulleur and Yannelis (2017) conclude that the student loan defaults increased during the Great Recession, which correlates with the home price decrease. These defaults were caused by labor market job shortages and impairment of the student’s potential for earnings, especially at entry-level jobs. Moreover, they conclude that the federal IBR program that the government introduced to reduce the burden of debt has had a positive impact.
Fan, L. & Chatterjee, S. (2019). Financial socialization, financial education, and student loan debt. Journal of Family Economic Issue, 40, 74–85. Web.
Fan and Chatterjee employ quantitative analysis in combination with quantitative methods to examine the 2015 National Financial Capability Study dataset and make conclusions about the students’ behaviors with or without student debt. The premise of this study is that many people in this state use financial loans, and there are factors that impact their ability to repay those, such as having financial education. Hence, this research helps understand what impacts the successful loan repayment as opposed to default and can be applied by policymakers to increase the percentage of repaid student loans.
This is a mixed-method study because the authors used qualitative methods by examining the correlation between different student loan data indicators, such as repayment rates, and compared these with the assessment of socialization and financial knowledge of the individuals. The limitation is that the authors used a wide variety of indicators, such as socialization, financial literacy, participation in financial education, and the rates of loan repayment, delays, and attitudes towards debt. Although this allows for a comprehensive analysis of different indicators, the use of such a variety of data limits the author’s ability to examine each aspect in depth.
The results indicate that 22% of participants are late on their payments, and 55% feel worried about their debt. Moreover, 55% reported feeling worried about their loans. The main outcome of this study is that students who have several types of loans, for example, federal and private are more likely to be late on their payments as opposed to those with a federal loan only. Hence, the results of this research help understand the issues that enhance the severity of student loan breadth.
Pietrantonio, K. R., & Garriott, P. O. (2017). A plan for addressing the student debt crisis in psychological graduate training: Commentary on “Graduate debt in psychology: A quantitative analysis” (Doran et al., 2016). Training and Education in Professional Psychology, 11(2), 94–99. Web.
Pietrantonio and Garriott (2017) offer a quantitative analysis of another study’s outcomes and conclusions. The authors focus on explaining the quantitative findings of a study that examines the psychological effects of the student loan debt that potentially affect the severity of the student loan issue. Since in this article the authors explore a phenomenon instead of analyzing data, this study has a qualitative design. This article focuses on the psychological determinants of the student loan depth and offers recommendations for mitigating this issue.
The main limitation is that the basis of the recommendations and hypothesis are the data and findings found in another research. Hence, the authors did not collect their own data, which would strengthen the credibility and reliability of their recommendations. However, Pietrantonio and Garriott (2017) use the theoretical developments and practical recommendations developed by the American Psychiatric Association to support their recommendations.
In the conclusions of this study, the authors recommend addressing the increasing burden of student debt by working with each individual and promoting their psychological wellbeing. For example, they recommend policymakers advocate for the increase of wages offered to entry-level professionals. Also, they suggest the need to focus on financial literacy training for students and the establishment of support programs. Ideally, if applied, these recommendations should help the government relieve the student debt burden as more students will be able to handle the psychological consequences of their debt and repay it on time.
Tran, A. G. T. T., Mintert, J. S., Llamas, J. D., & Lam, C. K. (2018). At what costs? Student loan debt, debt stress, and racially/ethnically diverse college students’ perceived health. Cultural Diversity and Ethnic Minority Psychology, 24(4), 459–469. Web.
The study by Tran et al. (2018) is the examination of the effect that student loan debt has on the wellbeing and life of these individuals. Moreover, the authors focused on examining the differences between different ethnicities pertaining to student debt. This is a mixed-method study because the authors examine the correlation between individual’s health indicators and their student loan debt. In addition, they use students’ own assessments and responses to analyze their attitudes towards debt.
One limitation of this study is that Tran et al. (20188) do not discuss how impairments of student’s health due to student loans affect their ability to repay or the likelihood of default. However, the authors differentiate between different racial and ethical groups to determine any variations based on this indicator. However, this study helps understand the individual-level impact that student loans have on people from different social and ethnic groups.
The findings of this study show that the transactional stress model is applicable for explaining the impact of debt on the wellbeing of the students, as opposed to the two-factor model. Moreover, there are some ethnic variations in the way perceptions of student dept impact the health of individuals since African Americans and Latino reported poorer health and the presence of psychological disorders such as depression.
Conclusion
In summary, student loan debt is a policy problem and a social issue for Americans because learners have to find ways to finance their studies and payout this debt for years after graduation. The different articles examined in this paper indicate that the depth of the student loan problem in the United States is beyond the financial implications of repayment and default since students feel pressure due to their dept and the low income they receive in entry-level positions. Some policy recommendations based on findings include offering financial literacy courses and psychological support programs, as well as promoting higher entry-level wages. Additionally, the findings support the correlation between defaults and the economy in general. For example, housing prices are linked to higher rates of defaults.
References
Addo, F.R., Houle, J.N. & Sassler, S. (2019). The changing nature of the association between student loan debt and marital behavior in young adulthood. Journal of Family Economic Issues 40, 86–101. Web.
Fan, L. & Chatterjee, S. (2019). Financial socialization, financial education, and student loan dept. Journal of Family Economic Issue, 40, 74–85. Web.
Krabbe, M.S. (2020). The price of higher education: Experiences of American student loan borrowers. Research in Economic Anthropology, 40, 109-123.
Mueller, H., & Yannelis, C. (2019). The rise in student loan defaults. Journal of Financial Economics, 131(1), 1-19.
National Center for Education Statistic. (2020). Student debt. Web.
Pietrantonio, K. R., & Garriott, P. O. (2017). A plan for addressing the student debt crisis in psychological graduate training: Commentary on “Graduate debt in psychology: A quantitative analysis” (Doran et al., 2016). Training and Education in Professional Psychology, 11(2), 94–99. Web.
Tran, A. G. T. T., Mintert, J. S., Llamas, J. D., & Lam, C. K. (2018). At what costs? Student loan debt, debt stress, and racially/ethnically diverse college students’ perceived health. Cultural Diversity and Ethnic Minority Psychology, 24(4), 459–469. Web.