Negative Health Effects of Student Debt
As the early part of 2022, about 7% of all student loan borrowers were in default, with a total value of about $86 billion. That's lower than usual due to the pandemic-related moratorium on payments, and it's expected to quickly rise to normal levels (about 10%) when the moratorium is lifted. Many expect it to rise significantly above normal levels, though, due to current economic trends and the potential for an economic recession.
Note: You may see smaller numbers, such as 2% or 3% default rates, but those refer to different metrics, looking at borrowers 3 or 4 years out of college, not ALL borrowers. It gives an idea of the financial health of students immediately after college, but it also has the additional effect of making the debt issue look much better than it is.
Student debt can have various negative health effects on individuals, and because student loan debt cannot be discharged via bankruptcy like credit card and mortgage debt can, it has a much stronger and long-term impact on people's health. Here are some potential ways in which student debt can impact a person's wellbeing:
Stress and Mental Health Issues: Multiple studies indicate that student loan debt can be a significant source of stress, and is strongly associated with hypertension, high blood pressure, anxiety, depression, and other physical and mental health issues. The constant worry about repaying the debt and the pressure to find a well-paying job can take a toll on a person's physical and emotional well-being.
Access to Healthcare and Delayed Care: According to surveys and other studies, individuals burdened with student debt may not be able to afford adequate health insurance and often delay seeking necessary healthcare due to financial constraints. Whether due to access or finances, they might forego routine check-ups or needed procedures, skip preventive care, or simply ignore symptoms, which can result in the progression of health conditions and poorer health outcomes.
Lifestyle and Well-being: The financial strain of student loan debt can impact a person's ability to maintain a healthy lifestyle. They may struggle to afford nutritious food, exercise regularly, or engage in activities that promote well-being, increasing the risk of chronic health issues.
Sleep Problems: Many students report that financial worries associated with student debt negatively impact their sleep, including disrupted sleep patterns, insomnia, or other sleep disorders. Untreated health issues may also impact sleep quality, and there is significant research showing how Inadequate sleep can negatively impact physical and mental health, affecting energy levels, cognitive function, and overall well-being.
Impact on Relationships: Student also report that debt often strains personal relationships, including family dynamics and romantic partnerships. Financial stress may lead to conflicts and impact emotional well-being, potentially resulting in strained relationships and decreased social support.
Career Choices: High levels of student debt may also influence career choices. Graduates report feeling compelled to prioritize higher-paying jobs over their passions or areas of interest to meet their financial obligations, which can lead to decreased job satisfaction and overall life satisfaction.
Long-Term Financial Burden: While all of the above indicate short-term impacts, long-term impacts are of great concern if the debt is long term. Student debt can affect individuals well into their adult lives and can lead to ongoing health-related challenges associated with chronic stress.
It's important to note that the impact of student debt on health can vary depending on individual circumstances and other factors. Seeking support, exploring repayment options, and prioritizing self-care are crucial steps to mitigate the negative health effects of student debt.