How Does Student Loan Debt Affect College and Career Decision-making?

January 24, 2020


By Katie Zuber, director of the Fall 2019 CLPS Internship Program

We know the statistics: 45 million borrowers in the United States collectively owe $1.5 trillion in student loan debt. In New York, the 58 percent of students who graduate from public and private colleges with debt owe, on average, $30,346. As debt levels continue to climb, many worry that indebtedness delays important life choices. Though the evidence is mixed, acquiring debt can result in some borrowers dropping out of college, changing career paths, foregoing graduate education, postponing homeownership and, for women, delaying childbirth. We know the consequences of student debt but we don’t know how students think about debt before and while they are in college.

To gain a better understanding of how loan debt affects students’ college and career decisions, interns from the Rockefeller Institute’s Center for Law & Policy Solutions went directly to the source. In the 2019 Fall semester, these five undergraduate researchers organized focus groups on three college campuses to ask students directly about their experiences in the student loan process. After reviewing the literature on student debt, what they wanted to know was: whether students felt prepared to take on the responsibility of paying for college; whether the prospect of incurring debt influenced students’ decisions about which college or major to choose; and what, if anything, students would have done differently. The researchers supplemented focus group discussions with interviews from key stakeholders including high school guidance counselors, college financial aid officers, and policy experts. Collectively, their findings give context to the aggregate statistics and provide a roadmap for addressing the current crisis.

This series on student debt features an examination of:

  • the role of counsellors in the dissemination of financial knowledge;
  • the individual and systemic factors that contribute to student debt;
  • challenges students face as they prepare to pay for college;
  • barriers to financial literacy among racial and ethnic minorities;
  • and the feasibility of free-tuition policies in the United States.

At a time when the nation’s policymakers are trying to decide how to approach the issue of student debt, it is imperative that we include students’ voices. The picture that emerges is one of students who feel immense pressure to go to college, and yet they struggle to navigate the student loan process. Beyond debating loan forgiveness and tuition-free programs, this research suggests policymakers can intervene earlier to make sure students and families have the information they need to make smart borrowing decisions.

Read the Series:

“Who Is Affected by the Student Loan Crisis and Why?” by Oluwakemi (Kemi) Kehinde

“Financial Literacy—Is There Really Just and Equitable Access?” by Joel Oyuo

“The White-Knuckle Ride to Financial Literacy: Understanding Your Student Loans” by Samuel Seitz

VIDEO: Presentation of Findings