The Psychological Toll of Student Debt 

By J Geiman

It is no overstatement to say that we are in the midst of a widespread mental health crisis. Research shows that both youth and adult mental health are worsening, while rates of treatment remain low even among those with the greatest access to care. While rates of adult mental illness were on the rise even before the pandemic, the grief, isolation, and anxiety brought about by COVID-19 have contributed to increased rates of more severe mental health symptoms, particularly among youth, LGBTQ+ individuals, and Black and Native American populations. After 18 months, we are still feeling these effects: navigating a world that, for many, still feels dangerous and uncertain while carrying the trauma of a year and a half of a pandemic, police violence, and political upheaval.

For 44 million Americans, this stress is compounded by the burden of a combined 1.7 trillion dollars in student loan debt. Higher education is supposed to improve our quality of life, granting access to high-quality jobs that provide greater stability, higher earnings, and critical benefits like healthcare and paid leave. However, the financial and psychological toll of student loan debt leaves many wondering if their degree was even worth it. 

Black borrowers, in particular, are most likely to feel the long-term stress of student debt while reaping the fewest rewards. While the majority of white students owe less than their original amount borrowed four years after graduation, 48 percent of Black students owe 12.5 percent more than the original loan amount after the same timeframe, and hold 186 percent more debt than their white counterparts even 15 years after graduation

Student debt has a profound impact on borrowers’ lives and well-being. Even for those who make their monthly payments, many make sacrifices to do so, including staying in unsatisfactory jobs and delaying homeownership or starting a family. For the 9 million borrowers in default—disproportionately Black Americans and those from lower-income backgrounds—their inability to pay has dire financial consequences. These include the potential for garnished wages; withholding tax returns and select federal benefits; and impacting credit, which can make it difficult to be approved for housing and certain jobs.

The burden of debt also contributes to acute mental health issues, including prolonged stress, anxiety, and feelings of shame. A 2021 mental health survey indicated 1 in 14 borrowers experienced suicidal ideation in response to the financial stress of student loans. Among borrowers who were unemployed or making less than $50,000 per year, this rate jumped to 1 in 8. 

This stress cannot be therapized away. We need real relief in the form of widespread student loan forgiveness. The Biden administration has already cancelled $9.5 billion in student loans for permanently disabled borrowers and those defrauded by for-profit institutions. This is a step in the right direction— but it is not enough.

We need President Biden to cancel student loan debt for all borrowers. Additionally, Congress must pass investments like those proposed in the current reconciliation bill to make higher education more affordable and end the student debt crisis for good. This is a matter of suicide prevention, racial equity, and economic justice—and it is critical to delivering the security and hope for the future that are critical to recovering from the COVID-19 pandemic and its economic fallout.