What is it about?

We explored U.S. student loan debt’s short-term consequences for the college-to-work transition. We tested two ways through which student loan debt may have a positive or a negative effect on the likelihood of obtaining full-time employment upon graduation. As college students who had student loan debt were more likely to worry about their finances, the negative path implied that they would thus experience more stress during their job search, which would reduce their odds of securing full-time employment upon graduation. On the other hand, the positive path implied that worry about their finances would make them more likely to work more hours during college, which would increase their odds of securing full-time employment upon graduation. Altogether, results suggest that student loan debt mainly had a negative effect on college students’ likelihood of obtaining full-time employment upon graduation via more stress experienced during the job search process.

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Why is it important?

Past studies have mostly focused on the long-term consequences of student loan debt (such as wealth accumulation or home ownership) so that the short-term labor market consequences of student loan debt have largely been neglected. We fill that void by explaining how such debt may influence students’ success in entering the full-time workforce upon graduation. In particular, we found that student loan debt largely impedes full-time employment through job search stress, shedding light on how poorer wealth accumulation may initiate early in one’s career via this delayed work transition.


This paper’s importance stems from the fact that while a high proportion of U.S. college students require a loan in order to afford a college education, the resulting loan debt can actually work against them when it comes to securing post-graduation employment. Our findings suggest that students may need to take steps to reduce finance-related stress during job search, and that universities and future employers might consider implementing relevant interventions for this purpose.

Ariane Froidevaux Froidevaux
University of Texas at Arlington

Read the Original

This page is a summary of: Is student loan debt good or bad for full-time employment upon graduation from college?, Journal of Applied Psychology, November 2020, American Psychological Association (APA),
DOI: 10.1037/apl0000487.
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