New Study Links Student Loans and Stress
Posted By Abby Perkins on March 9, 2015 at 11:52 am
Since 1978, college tuition has increased by an astronomical 1,225%. According to the NCES, average annual costs for undergraduate education range from $14,300 at public institutions to $37,800 at private, nonprofit institutions. And with college costs on the rise, more and more students are applying for student loans.
Student loans are a useful way for many students and families to pay for college. In fact, nearly 70% of students who graduated from public and nonprofit institutions in 2013 had student loan debt. However, student loans can also have adverse effects on the well-being of young adults who carry them – effects that that researchers are only just beginning to study.
The student loan crisis
Americans now owe more than $1 trillion in federal student loans, according to the Consumer Financial Protection Bureau. Student loan debt grew 20% between May 2011 and May 2013 (credit card debt grew only 2% over the same period). And the average student borrower owes more than $28,000 upon leaving college, a substantial sum for new graduates who are often getting by on entry-level salaries.
Even with jobs numbers on the rise, today’s college graduates still face more unemployment and underemployment than in years past. That means student loans are often more of a burden. According to American Student Assistance, high interest rates and high monthly payments are causing recent grads to delay milestones like starting families, buying homes, or saving for retirement. And unsurprisingly, they’re also having a negative effect on psychological health.
Scientific research ties student loans to chronic stress
Researchers have only recently begun to study the effects of student loans on psychological well-being.
Scientists at the University of South Carolina just released the results of a study on the relationship between student loans and mental health in early adulthood. The 2014 report, published in Social Science and Medicine, included data from the National Longitudinal Survey of Youth 1997, a representative sample of young adults in the United States.
In the study, participants were evaluated using the Mental Health Inventory, a standard questionnaire used to assess a person’s psychological state. The results showed that people with student loans were more likely to exhibit signs of poorer mental health. Further research is needed to see whether student loan debt can be tied specific mental health issues. (Other types of debt – including consumer debt from credit cards – are linked to anxiety, depression and other mental disorders).
Minimize stress by reducing the burden
There are several ways to minimize the burden of student loans – and the stress that comes with them. Chief among them is to start early, by choosing an academic institution with affordable tuition and finding a feasible way to pay for it. Prospective students should also pay careful attention to average graduation rates, which may exceed 4 years at some colleges. Searching for scholarships and grants that won’t need to be repaid can also help offset the need for student debt.
For those who have already graduated with student loan debt, loan consolidation may be able to help reduce your monthly payments or your overall loan balance. Talk to a financial adviser to help determine what will benefit you most.