Student Loan Debt and the Impact on the Labor Market

This paper examines the economic impact of student loan debt at the personal and national level. This issue is of high importance. There are several issues surrounding student loan debt that college students do not always consider. Collectively, the impact of these issues, particularly including the increased time that students take to get degrees, affects a large majority of college graduates. The U.S. student loan market stands at approximately $1.5 trillion—the second largest consumer debt market in the country behind mortgage debt. The American higher education system relies on loan funding as the prevailing method by which American families pay for college. Student debt spills over on individuals and communities, as well. The impact of student debt provides different outcomes on the labor market, including wages, hours of employment, and working hours. Finally, this paper examines important differences in the performance of the labor market for people who receive student loans compared to those who do not.