Does Mounting School Debt Contribute to Student Mental Health Issues?


Total student loan debt in the United States now tops $1.3 trillion dollars, with some individual students owing well over $100,000 from only their undergraduate educations, according to Forbes.

With heavy financial burdens placed on young graduates’ shoulders, researchers at several universities began to wonder if high student debt levels might harm mental health. Unfortunately, the answer is a yes.But to what degree?

Student Debt and Mental Health

A slew of recent studies demonstrate that school debt has a negative influence on students’ mental health. A recent study for the National Institutes of Health, for example, found that student debt correlates strongly with higher levels of perceived stress and higher rates of depression. Equally alarming, the study also found indebted students had higher blood pressure and worse self-reported general health.

Interestingly, even students with great jobs and high salaries suffer from the stress and anxiety caused by student loans. As Live Science reports, surgeons and school teachers with equal loads of debt are roughly equally worried about paying it back, even though the surgeon brings home a much larger salary. This could partially be because many higher paid careers are linked to extended schooling and thus, higher debt.

One group of people does have some immunity to the mental health effects of debt, however: students from poor socioeconomic backgrounds seem better equipped to handle the financial stress. Researchers theorize that growing up poor may have prepared them to handle financial stress more effectively.

What’s the Cause

The nature of the relationship between student debt and mental health problems isn’t tough to guess. First, the financial pressure associated with hefty loan payments, especially combined with stagnant wages and a poor job market, piles on stress for new graduates trying to find their way in the world.

Besides the stress of opening those monthly loan statements, indebted students are also less able to afford the things that make life better: houses, cars, weddings and other big ticket items. That’s why college grads are increasingly living at home or relying on rental units and delaying marriage, none of which is good for their mental health.

Hope for the Future

Despite all the doom and gloom and the ever-rising tuition rates, there is some cause for hope in the student loan crisis. Thanks to media reporting and increasing attention from colleges and universities, students are more aware now of the risks of taking on large debt. Many financial aid offices do everything they can to supply students with information about repayment. Hopefully, that extra education will translate to less debt-related stress at graduation and improved mental health for new grads in the workforce.

Unfortunately, the easy solution of cutting the cost of college just isn’t likely to happen. The inflation-adjusted cost of higher education has grown by 250 percent over the last 30 years, according to The Atlantic, with no end in site for the escalation.

Many people – the President, other politicians, Mark Cuban, educational leaders – have proposed solutions to lower student debt. Solutions include giving community college for free, capping the amount students can borrow from private student lenders and more.

CampusLogic’s AwardLetter is based on a simple solution: educate students. Teach them how to borrow responsibly, give them tools to understand the repayment burden of what they’re borrowing, give them enough information that they pause and think critically before choosing to accept their maximum borrowing amount. That pause may contain the difference between $1.3 trillion and $1.4 trillion. Afterall, Western Governors University students borrowed $93 million less the first year WGU used AwardLetter. $93 million is a great place to start, but what about your students?

For more information on AwardLetter, click the image below.


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