Figuring out finances can create challenges, and we are here to provide some information that could be helpful for you! In simple terms, the study The Effect of Households’ Student Debt on Life Satisfaction led by Dr. Thomas Korankye[1] shows that having student-loan debt harms how satisfied people feel about their lives. Even though taking on debt is often seen as an investment in the future, it can make people feel less satisfied with their lives until the debt is fully paid off.
When individuals and families decide to invest in college education, they may use various sources like scholarships, savings, income, or loans to pay for it. If a person believes that going to college will bring good returns but doesn’t have enough money, they might take out loans to manage expenses. While loans make college more affordable, the outcomes are uncertain.
Taking out student loans can affect different aspects of life outside of educational purposes, like owning a home, career choices, further education, marriage decisions, health, financial stress, and overall well-being. Investing in education is believed to have positive effects on future outcomes like job prospects, wealth, and satisfaction. The student may not complete college, or the expected benefits like a good job or increased income may not materialize. So, while a student loan can help someone gain knowledge and skills, the debt itself can be a stressor to the individual’s satisfaction. Having student loan debt seems to impact various aspects of life. Some of these impacts could be career choices, mental health, and overall well-being. This can create difficulties for the future when it comes to financial decision-making. For couples, this could mean that if you or your partner receives a job offer that will pay more than a job that you are passionate about, that could create a sense of pressure due to the weight of having student debt that you need to pay off.
Narratives shared in a recent study[2] highlight the profound consequences of financial distress, where individuals grapple with the aftermath of medical crises, childhood adversities, and societal disparities that intersect with their financial well-being. These experiences evoke a spectrum of emotional responses, from guilt and anxiety to a pervasive sense of helplessness, shaping education and career trajectories. The study further explores coping mechanisms and societal constructs, such as ableism and gender biases, that amplify financial strains. It concludes by advocating for trauma-informed teaching methods, emphasizing the imperative of addressing financial anxieties, particularly within academic spheres, with sensitivity and empathy. There are specific approaches that can help when working through this. By empowering individuals with financial literacy and access to mental health support, we as family and community members can promote inclusivity and equity in education and job opportunities.
Student loan debt can significantly impact the dynamics and decisions of individuals, couples, and families. The financial strain of student loans can create tension and disagreements about budgeting, spending priorities, and long-term financial goals. They may find themselves in a position where they must prioritize debt repayment over other important life milestones, such as buying a home or starting a family. This can lead to feelings of frustration and limitation, as individuals may feel constrained by their financial obligations. Student loan debt can also affect the overall financial stability of a household. It may limit the ability of individuals to contribute to joint expenses or savings, leading to unequal financial burdens within a relationship. This imbalance can create feelings of resentment or inadequacy and may strain the emotional connection between partners. Lastly, the long-term impact of student loan debt on financial security and retirement planning is often overlooked. Some couples may need to delay retirement or adjust their retirement savings goals to account for debt repayment, impacting their quality of life in later years. Overall, the implications of student-loan debt extend beyond individual financial concerns and can significantly impact the well-being and stability of couples and families.
Takeaways:
1. Hope for the future: Despite the challenges of student-loan debt, investing in education can still have positive long-term outcomes such as improved job prospects, higher income potential, and increased satisfaction with one’s career. There are many local, regional, and national resources available. Reach out to a financial planner if you are seeking guidance. There are many online financial literacy courses for free as well!
2. We can enact change: Advocacy for policies that address systemic issues and promote equity in education and financial aid can help reduce disparities in educational debt, offering hope for a more equitable future. Couples can advocate for policies that address student loan debt and financial equity by educating themselves. Contact your elected officials, share your stories, and promote financial education. These efforts can contribute to a more equitable future.
3. Strength in numbers: You can be a source of strength in your marriage or relationship. As a couple, the two of you can figure out how you want to work through financial struggles in ways that will work best for your situation. This may involve setting financial goals, creating a budget, seeking financial advice, and supporting each other emotionally. Working together can help strengthen your relationship and improve your financial well-being. Together, you can explore and decide on the best ways to work through these challenges based on your unique situation.
References:
[1] Korankye, T. & Kalenkoski, C. M. (2021). The effect of households' student debt on life satisfaction. Journal of Family and Economic Issues, 42(4), 757-772. https://doi.org/10.1007/s10834-021-09753-9
[2] Doehring, C. (2018). In over our heads with financial anxiety from student debt. Pastoral Psychology, 67(2), 115–124. https://doi.org/10.1007/s11089-017-0772-2