Debt from college affects career choices, study said.
A 2011 study from the University of California-Berkeley and Princeton University showed that the higher a student’s loans were, the more likely the student was to seek jobs in higher wage brackets.
Alumna Melissa Welsh graduated in 2014 and has since found a job and started paying back loans.
“I truly feel as though I have a good handle on my debt,” Welsh said. “Through commuting I was able to lessen the amount that I owed helping my stress levels immensely.”
The study focused on three different groups of students: those with loans and grants, those with only grants and those with no financial aid at all.
It was discovered that for every $10,000 in additional loan obligations, a graduate would seek approximately $2000 more in his or her salary. Graduates who had the highest loan burdens were also between five and six percent less likely than other graduates to work in nonprofit organizations, government or education.
Some students are able to avoid having high loans by spending less money overall by commuting.
“I am lucky to not have a terrible amount of debt that I attribute to my scholarships and being a commuter,” Welsh said. “Currently my loans are a bill to pay each month not affecting me too much.”
Not everyone is able to commute to campus like Welsh did though.
In 2011, the study found that the average debt a student left college with was $32,000 with the overall debt for students as a whole totaling $870 billion. To put this into better perspective, the study compared that total to the $693 billion of credit card debt and $730 billion owed in auto loans.
With the burden of college becoming so high for students, the question of whether or not students are prepared to handle the burden arrises.
“I did not have much understanding of debt and loans while in school,” Welsh said. “Being employed in the financial world I work with 401 K plans everyday and was fortunate enough to learn about interest and the wonders an extra 20 dollars per payment will make. I do wish that I had more knowledge of the ins and outs of loan debt and how to get ahead. “
The study suggests that students are aware of their debt burden because they choose higher or lower paying jobs based on how much debt they graduate with, but this does not make it easy for every graduate to be in control of their debt.
Welsh may be one of the lucky ones who hasn’t become overwhelmed by the stress of rising student debts.
“Going through the transition into full time employment and the pains of life after college, I am very happy with my current status and situation,” Welsh said. “I also started paying my loans two months early and gave myself a cushion to make sure that if money was tight one month I could go without paying and still be ahead.
“I do not feel as though my debt holds me back in any way,” Welsh said.
