Struggling to Thrive: The Connection Between Student Loan Debt and Job Market Challenges

Not so long ago, new graduates could look forward to stepping into the job market with the ability to finally begin reaping the rewards of all of their hard work. Back then, someone finishing their college education could expect to be considered for higher-level positions that came with increased salaries.

Now, however, the future isn’t so bright for new grads. Many former students are still struggling to thrive despite having earned their degrees. Exploring the connection between the rising number of people with excessive student loan balances and the current job market’s challenges makes it clear that it’s time to reduce the burden of educational debt.

Borrowers Are Jumping On the First Job Offer They Receive

Although most student loans offer a grace period before students have to start making payments after graduation, the looming repayment date still affects graduates’ career decisions. Instead of entertaining offers from several employers, borrowers are now accepting the first job offer that comes along. While this does help them immediately start earning an income, it could mean making sacrifices in other areas, such as working outside of their chosen field.

Many Debt Holders Are Stuck In Low Paying Careers

Borrowers are also failing to negotiate for higher salaries like they did in the past. Between hearing about a competitive job market and knowing that they have debt to repay, many graduates are so eager to accept a job offer that they don’t question the details. Since future raises are often based upon a percentage of the current salary, starting off too low could cause borrowers to lose out on thousands of dollars over their future careers.

People Are Holding Tight to the Jobs They Have

In the past, people moved out of their positions as they got promoted or moved to a higher-paying company. This movement left openings for new graduates to move into entry-level positions. Now, more people are opting to avoid making major changes in their careers out of the fear that taking a risk could backfire and lead to job loss that impacts their ability to pay back their student loans.

Without people moving out of the lower level positions, new graduates are finding that there’s nowhere to go. Sadly, many people with college degrees are opting to take multiple low wage jobs while they wait for an opening in their chosen career field that might not come for a while.

Prospective Students are Forgoing Degrees With Low Pay-Offs

The current teacher shortage reflects how many students are opting out of entering an educational program that is known for having high expectations with low salaries. Since many teaching positions today require a master’s degree, students are instead choosing to explore other career fields with the same requirements but a better payoff. For many students, it just makes sense to pursue a higher-level degree in software development that offers a chance to earn a six-figure income rather than get a master’s in education and still struggle to meet the cost of living.

Wary New Students Are Avoiding High-Cost Career Programs

Get ready to see a shortage of dentists, doctors and other higher-level degreed professionals over the upcoming years. After seeing how earning a medical degree could cost hundreds of thousands of dollars in loans, many students are turning to more affordable educational programs. While we need people in the trades, it is leading to a shortage of eligible candidates for other positions that are vital in our society.

Everyone who works hard to finish their education should be able to enter the job market with excellent prospects for earning a living. Shouldering graduates with a heavy debt burden only weighs them down and prevents them from finding success in their chosen career fields. Making it easier to pay back high loans gives people the freedom to expand their career options. By doing so, everyone benefits as people can make greater contributions to the labor force that reduces strain on employers and introduces greater prosperity to the economy.