As students forgo the stress of college assignments and dive into the workforce, one stress that lingers with them years after they graduate from college is student loan debt.
UTA faculty-led research published Feb. 27 found that student loan debt is likely to reduce chances of finding full-time employment upon graduation. The researchers sampled graduating seniors from four different U.S. universities located in the Pacific Northwest, Midwest, Southeast and Northeast.
The COVID-19 pandemic has given students different internship and networking opportunities as the job market has shifted to mostly remote work, but it seems harder now than before to enter the workforce right after college.
Once students have student loan debt, they tend to devote a lot of their attention and energy toward the financial burden, causing psychological stress, said Ariane Froidevaux, assistant professor in the Department of Management and main contributor of the research article.
The financial stress of debt — a primary resource loss — would stay with students when they are looking for full-time employment. In the process of the job search, students would further undergo stress — a secondary resource loss — from potential employers, uncertainty and rejections.
But the research shows that students’ chances of employment increases if they work a part-time job while in college. This also applies to students’ part-time jobs unrelated to their field of study, Froidevaux said.
“Each additional hour students worked per week during their last semester corresponds to a 3% increase in their odds of being full-time employed (vs. unemployed),” according to the research document.
The research, however, concluded that the negative impact of students’ debt prevails over the advantage of working a part-time job while in college.
Alumna Aarathi Anitha Rajeev, who graduated in May with a master’s in electrical engineering, took out a loan from a national bank in India, her home country, to study in the U.S.
During Anitha Rajeev’s time at UTA, she worked as a cashier at the Market in the Fine Arts Building, but she has been unemployed since the campus shut down in March. As an international student, she can’t work off campus.
She planned to find a job after college to pay off her student loan debt as it is tied to her mortgage loan back home. She has an estimated debt of $50,000, and she is still on the search for employment.
“I’ve been finding it very difficult to manage the living expenses,” she said. “I’m very particular about finding a job right now cause I cannot depend on my parents or friends for too long because they are affected by the same situation.”
She started receiving interview calls in late August and hopes to obtain employment by the end of September.
“It’s [a] very stressful situation,” she said. “I hope I get through this situation as early as possible.”
International students in the U.S. need to find employment in 90 days upon graduation to maintain their legal status.
Alumnus Jithin John, who graduated in May with a master’s in industrial engineering, tried but did not find full-time employment upon graduation because of his status as an international student and how negatively the COVID-19 pandemic has affected the job market.
As the 90-day countdown started, and he had a few interview calls with no success, John accepted an internship with the company that he worked for the past summer with hope of transitioning to full-time employment afterward.
John took out a student loan from a national bank in India, his home country, to study in the U.S.
He plans to pay off his estimated $50,000 of debt in five to six years. He is confident that he will pay off his debt as he got an education from the U.S. and because of the high exchange rate between the U.S. dollar and Indian rupee.
He said all the international students that he knows who pursue a master’s degree have student loan debt on their back.
In other parts of the world, student debt is limited to a small group.
In Switzerland, Froidevaux’s home country, 12% of students have study-related debt in 2016, while 65% of U.S. college seniors who graduated from public and private nonprofit colleges in 2018 had student loan debt, according to the Institute for College Access and Success.
Froidevaux said the tuition fees are low in Switzerland, and the government has programs to help students if they do not have the money for college. But the overall university system is different from the U.S. For example, most students do not live in a dormitory, and as a result, such fees do not exist.
In the U.S. even with the help of the government, many residents still need to take out loans to attend college.
History senior Christian Joeckel has taken out student loans since his freshman year. Now by the end of the fall semester, he will have an estimated $17,500 in student debt.
“I think that [student loans are] valuable and necessary for students to be able to even go to college,” he said. “Cause I know, I, for certain, would not be able to pay for college without it. However, I do think that the pricing is a bit exorbitant.”
His biggest worries are how long will he take to pay off his loan and what kind of protection he would have if he loses his job or cannot find one. His student loan debt has added an extra layer of stress rather than motivation.
“It does make it difficult for people to get an education and not be in debt for a very long time, if not their whole life afterward,” Joeckel said.
His first career option out of college is to teach in high school as most school districts provide student loan forgiveness programs, and at the same time he would have the chance to practice his public speaking skills and deepen his knowledge of history.
Student loan debt is more than a financial burden — some students see it as a limiting factor to their ideal job.
History senior Erika Rivera’s concern as a student is always about making ends meet. But as she aims to graduate this semester, her concerns have shifted toward repaying her student loan debt.
The last time she checked her debt in May it was at $35,000. She fears that her student loan would limit her likelihood of getting a job as she wishes to work for the Department of Defense.
When it comes to finding employment upon graduation, Froidevaux suggests students go to the Lockheed Martin Career Development Center in the University Center to have their resume and cover letter reviewed before sending it to employers. She also suggests students seek help within their own family or circle of friends.
The Lockheed Martin Career Development Center also provides mock interviews to help students practice their interview skills and learn which questions to expect during an interview.
The research suggests that if students view loan debt as an investment, it can reduce stress. To manage stress, Froidevaux suggests students focus on the present moment and reframe the idea of debt.
“It’s how you choose to frame it,” she said.
For alumnus William Maddox, he views student loans as a “necessary evil” for students who can’t pay off their tuition immediately and especially for those who don’t get scholarships or grants.
Maddox took out a student loan to study at UTA for about two and a half years before losing interest in his chosen field of study. He is now out of school, but his student loan debt remains. He has an estimated debt of $17,000.
“[Debt is] a couple hundred off my paycheck every week,” he said. “It’s not a stress, it’s more of a motivation to go back to school to get a better job to pay it off.”
Maddox plans to go back to school for an aviation program at Tarrant County College.
“Don’t be afraid to borrow money to pursue something you really want to do,” he said. “If it’s something you are truly passionate about, then a loan shouldn’t be that much of a deal for you. That’s just a barrier that you’re breaking to get to your ultimate goal.”