Earning a college degree is supposed to open doors in life and provide greater opportunities for success. Ironically, millions of college graduates today find themselves hampered by all of the debt they had to accumulate to attend college in the first place.
The average student loan borrower will graduate with roughly $30,000 in debt to pay back. Predictably, a financial albatross like that hanging over one’s head makes it incredibly difficult for a young adult to find their financial footing in life. This is hardly breaking news; student debt has long been linked to reduced wealth accumulation (ability to save for the future) and lower odds of ever owning a home.
Now, a new study from The University of Texas at Arlington is asserting that student debt can adversely impact graduates in another way. Researchers say that just having student debt can make it harder for someone to secure their first full-time job.
Why? Pressure & stress. For an individual in their early 20s, who up until that point had spent their entire life as a full-time student, attempting to enter the workforce with literally tens of thousands of dollars weighing them down often leads to overwhelming anxious feelings. All of that anxiety, pressure, and stress can make it that much harder for graduates to secure a job.
When every job application and interview feels like one’s “way out” of debt, candidates are bound to feel more pressure, which in turn leads to nervousness on job interviews and sloppiness on job applications.
In short, student debt is creating incredibly high stakes right out of the gate for young adults.
“Student loan debt creates an anticipated loss of financial resources, which brings higher levels of stress to student job-seekers,” comments first study author Ariane Froidevaux, assistant professor of management in the College of Business at UTA, in a release.
Moreover, stress and anxiety are exhausting. Researchers also note that if a person is feeling particularly “financially strained” they’ll likely lack the needed energy or motivation to properly tackle a job search. When you spend all your time worrying about paying bills, it’s going to take a toll on other life areas.
Similarly, the study revealed that student debt often motivates people to spend more time working part-time jobs. When bills are due at the end of each month a steady paycheck from a part-time gig (or gigs) sounds pretty appealing. Ultimately, though, focusing on part-time jobs isn’t going to help find a full-time job and career.
Data on 1,248 graduating seniors from four American universities were used for this project.
“Student debt mainly had more negative effects on college students’ likelihood of securing a full-time job than beneficial ones,” professor Froidevaux says. “You can do certain things like getting a job during the summer that may help you get a full-time job upon graduation. But in the end, student debt leaves students with a lot of stress, and it is long-lasting.”
The research team at UTA recommends that colleges start to educate students on the importance of financial planning and job search-related stress management long before graduation. Hiring companies may also want to consider instituting HR policies offering new employees student loan financial assistance.
What can soon-to-be or recent college graduates do to avoid all of this? The study’s authors have a simple suggestion. Do your best to wrap your mind around the fact that you’ll have to repay the debt. For many college students, loans are an abstract concept that doesn’t have to be worried about until after graduating. This approach often leads to a harsh dose of reality once that first loan payment is due.
Also, some graduates have found stress relief by thinking about their debt as an investment in their future.
“Student loan debt is a fact of life for most college graduates,” concludes George Benson, professor, and chair of the Management Department in the College of Business at UTA. “This research shows that the impact goes beyond the debt itself. I like that the research gives recommendations for ways to reduce stress. It also has suggestions for those businesses that hire our graduates to help those stress levels.”
The full study can be found here, published in the Journal of Applied Psychology.