Graduate indebtedness: its perceived effects on behaviour and life choices – a literature review

de Gayardon, A. and Callender, Claire and Dean, K. and DesJardins, S. (2018) Graduate indebtedness: its perceived effects on behaviour and life choices – a literature review. Working Paper. Centre for Global Higher Education, London, UK.

Abstract

Around the world, student loan debt is rising. Growing numbers of students rely on student loans to pay for their higher education and their levels of borrowing are increasing compared with previous decades. In countries like England it is anticipated that the majority of graduates will be repaying their loans for most of their working lives. For many, having student loan debt is no longer a short-term condition but is becoming the new normal. There is now value in exploring how student loan debt influences individuals’ choices, behaviour and life events once they have left higher education. Yet, the academic literature on the impact of student loan debt on decisions made after leaving higher education and later in life is scarce. The few studies available, mostly based in the US, tend to show that individuals with student loan debt make different career choices, delay buying a home, have worse mental health, and are less well-off financially throughout their lifetime as well as being less prepared for retirement. Student loan debt among women is also negatively related to family formation. The possible critical impact of student loan debt on the future of our societies and economies calls for further research to fill the gaps in this limited extant literature. This includes moving beyond its US-focus, its dependence on secondary datasets, and its narrow focus within a small number of disciplines. Future research should aim to improve and expand methodological research designs, in particular by using qualitative methods, analysing longitudinal datasets, improving sampling, and trying to show causality. Questions asked in these studies should encompass such issues as the evaluation of possible delays in decision-making, the difference between completers and non-completers, the importance of attitude to debt, and the impact of different student loan repayment plans.

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