Debt Takes a Toll

Over the past three-plus years, the 43.6 million individuals with federal student loan debt have had to confront a roller coaster of uncertainty. First, the pandemic’s all-encompassing disruption prompted a pause on federal student loan payments (a pause that itself included a number of unexpected, often last-minute extensions). Then, campaign rhetoric became reality when in 2022, the Biden administration offered the largest student debt forgiveness plan in U.S. history, committing to canceling $400 billion of student debt. Next, a deal to raise the national debt limit and prevent default included a provision mandating student loan payments would need to restart as of October 1, 2023. After, the Supreme Court weighed in, ruling Biden’s debt forgiveness plan out-of-bounds, forcing the administration to regroup. And, finally a new income-driven plan and other administrative fixes were rolled out, prompting (and promising) even more relief.

And those are just the headlines. Describing the mix of emotions dominating the lives of debt-holders, the Washington Post used words like “uncertainty,” “confusion,” “anxiety,” and “fatigue.” By the end of the fourth quarter of 2022, student loan debt totaled $1.774 trillion, up from $0.52 trillion in 2006. As legislators continue to try to find public policy answers to the crisis, and as anyone who has experienced the past three years can no doubt attest, the extreme ambiguity that has marked recent student debt conversations has taken a toll. A 2023 University of Georgia analysis of Twitter and Reddit language on student debt found a high incidence of posts mentioning poor mental health, concluding that “higher volumes of negative sentiments and emotions of sadness, fear, and anger warrant immediate attention of policymakers and practitioners to reduce the cognitive burden of student debts.”

What we weren’t really interrogating was this massive shift in how we pay for college.

Jason Houle, associate professor of sociology, Dartmouth College

While all of this highlights the urgent need to examine the relationship between student debt and health, the challenges presented have a much longer history. To shine light onto this wider context, The Practice spoke with Jason Houle, an associate professor of sociology at Dartmouth College. Houle has always been concerned with the idea of social mobility—what forces keep someone from rising and what propel them forward and up. Higher education has always played an important role in this puzzle. When Houle arrived at Penn State to start his graduate degree in sociology, he became further fixated on studying social determinants of health, or “how our lived experiences, our social status, our resources, get under the skin and impact not only our quality of life but also how long we live,” he says. During his college years in the early 2000s, the cost of higher education was already rising. (A report from Georgetown University’s Center on Education and the Workforce detailed a 169 percent increase in college costs from 1980 to 2020.) This felt important, but, he says, sociologists were not examining student debt closely (yet), and certainly not its relationship to health and mobility. While Houle was pursuing his doctorate, the 2008–2009 recession occurred, compounding the situation further.

Scholars were quick to point out the importance of higher education in our social safety net: perhaps “the last engine of upward mobility outside of the military in the United States,” Houle says. Traditional sociological research also looked at levels of socioeconomic advantage—something traditionally measured through education level, income, and occupation—and health, the conclusion being that higher levels of education were typically equated with better physical and mental health. But Houle saw a missing—or at least new—dynamic at play. “What we weren’t really interrogating,” he says, “was this massive shift in how we pay for college”—and whether (and how) that shift impacts traditional thinking on the relationship between education, social mobility, and/or health. He says that “college was traditionally something that was either inexpensive or supported by higher ed institutions or the state.” Today the landscape has shifted. Higher education “is almost exclusively funded by students and, to some extent, their parents, often through taking out loans,” he says. This shift has an impact not only on the overall U.S. economy but on the individual lives of borrowers—on the ability of young adults to buy houses, pay for health care, and decide when and if to have kids. It also complicates the relationship between higher education and health. As the past three-plus years have illustrated, the impact of this debt-based system of higher education on mental and physical health requires deep investigation.

A long(er) view of health

While a host of studies have analyzed the impact of debt on health as a snapshot in time, Houle, who was trained as a demographer, favors a longitudinal view, asking, How does debt impact health over a long period of time? “One of the biggest takeaways is that there’s a lot of heterogeneity. We like a simple story where we can just say student loan debt is bad for our physical and mental health, full stop. But that doesn’t always seem to be the case, depending on who you talk to and when you talk to them,” Houle says.  

Drawing on the National Longitudinal Surveys of Youth from 1979 and 1997—surveys from the Bureau of Labor Statistics that follow different cohorts of individuals and ask them questions every few years—Houle, along with others, has written a number of papers investigating the health impacts of unsecured debt on individuals at various points in time. He has also conducted qualitative and quantitative work focused exclusively on the impact of student debt on marginalized populations. “What you find is that student loan debt tends to be associated with better outcomes when people are in their teens and early twenties, before they’ve started paying it off. It is a resource that’s helping them get into and stay in college,” Houle says. The flip side is that “as soon as they enter repayment—as they move in their mid-twenties and beyond—things start to look a little more bleak, with an increase in depressive symptoms or health problems,” he says.

Rachel Dwyer, professor of sociology at The Ohio State University, calls this debt a “double-edged sword”—debt that acts as “both a resource and a liability.” Student debt can be a tool that individuals use to access an education that would otherwise be unavailable to them. Moreover, as Houle notes, there is a broader context of education “instilling a sense of control or mastery in your life.” Taking out debt to achieve that can be instrumental—as a means toward an end.

But, Houle warns, debt can be a “resource that helps you until it hurts you.” Over time, students graduate and enter repayment, and debt begins to feel like a liability, he says. Student loans are an “investment,” he says, and therefore “a bit of a gamble.” Houle is clear that he is not saying it’s not a good choice. “It could be a good bet,” he says. “But it is a bet. That means for some people that investment’s going to pay off. For some people it might not.” For those, Houle explains, debt can be a “chronic stressor.” Stressors can “challenge us in ways that make us grow,” he says. “But they can be really bad for us if they’re consistently weighing on us.”

Research focused specifically on student debt and health supports this notion. For instance, in the aptly titled 2014 paper “Sick of Our Loans: Student Borrowing and the Mental Health of Young Adults in the United States,” Katrina M. Walsemann, Gilbert C. Gee, and Danielle Gentile examined the association between student loans and psychological functioning for currently enrolled students and those between ages 25 and 31. They conclude that for both groups, “student loans are associated with poorer psychological functioning.” They say: “This association is seen both for the cumulative amount of student loans borrowed across the course of schooling, as well as for the yearly amount of student loans borrowed while in college.” The authors stress that the impacts, while modest, persist when considering economic and demographic factors, such as income, educational attainment, occupation, and parental worth. Put simply, student debt can negatively impact psychological health for students and recent graduates.

How do these numbers change over time? What about older graduates who may have higher incomes? In a 2022 paper, Houle, along with Adam Lippert and Katrina M. Walsemann, examined the relationship between student debt and cardiovascular health in early-midlife individuals—ages 35 to 49—an age bracket entering (or in the prime) of their careers, including earnings. Such individuals are also frequently having children, buying homes, and caring for parents. What did they find? They write, “Student debt attenuates the health benefits of college completion and the socioeconomic advantages of a 4-year credential” among early-midlife adults. Put differently, as noted above, while research shows having a college degree correlates with certain socioeconomic and health benefits (for example, more stable employment opportunities and therein better chances for health care), those benefits are lessoned by student debt. Indeed, the authors report, “For cohorts who came of age and attended college in an era of debt-financed higher education, student debt may have long-term health consequences and accelerate physiologic weathering [emphasis added].”

Additional longitudinal research on the relationship between debt and health reinforces this point. In the 2021 paper “Trajectories of Unsecured Debt and Health at Midlife,” Houle and his coauthors Adrianne Frech and Dmitry Tumin, again relying on the National Longitudinal Study of Youth from 1979, determined debt and debt-to-income trajectories, which were then used to “predict three pain and disability-related health outcomes at 50 years of age.” In doing so, they identified a set of relationships between unsecured debt (like medical or credit card debt not tied to an asset) and physical health. Among the things that they determined: those with unsecured debt have fewer funds to put toward health care, food, and other practices that may promote better health; debt causes stress that exacts a physiological toll on the body; and unsecured debt itself often arises from other stressful events (such as medical needs) that themselves impact overall health and well-being. Reflective of the very real physical health concerns associated with unsecured debt, Houle, Frech, and Tumin’s analysis revealed that “those with constant high debt or accumulating debt later in life were more likely to report pain interference or stiffness” than those with constant low debt. While this research did not specifically examine student debt and its impact on physical or mental health, the lessons learned do provide a macro lens through which one can begin to assess the relationship between debt and health.

To the extent that debt is a problem for our health and well-being, it is because it’s this noxious, chronic stressor that over long periods of time can cause health problems.

Jason Houle

As one might expect, debt’s relationship to mental well-being is also particularly problematic. In a paper relying on the same data set that examined the relationship to physical health, Houle and his coauthor Amy Ruining Sun found that while debt can be “empowering” for young borrowers, “respondents who cycle in and out of high debt levels or have consistently high debt levels have elevated depressive symptoms relative to those with low or no debt.” In a model looking at absolute debt level, the researchers determine that those with consistently high debt “report 21 percent higher depressive symptoms than respondents who report no or low debt across the life course.” Elaborating on this research, Houle says that “to the extent that debt is a problem for our health and well-being, it is because it’s this noxious, chronic stressor that over long periods of time can cause health problems.”

Houle has complemented such quantitative analyses with interviews, often done in collaboration with Fenaba Addo, associate professor of public policy at University of North Carolina–Chapel Hill. Through their interviews they have tried to understand for whom student debt is a particular burden, which often “falls along the traditional cleavages of class and race in our society,” Houle says. In their recent book A Dream Defaulted: The Student Loan Crisis Among Black Borrowers (Harvard Education Press, 2022), Addo and Houle describe a host of frustrations for Black borrowers in particular. Houle notes that some borrowers expressed a “personal responsibility” narrative, saying things like “I find myself in all this debt. What did I do wrong? I must have made some bad financial decisions.” Others, he says, showcased a “sense of injustice—this sense that we have been told our whole lives that we need to go to college, and if we do that, we’ve made the right decision and we’ve somehow become a success or we’ve done the right thing.” And many people, Houle says, felt both simultaneously.

These narratives, Houle says, reflect the chronic strain student debt produces. “When you talk to people who are struggling with debt,” he says, “they wake up in the morning, asking: ‘OK, what am I going to do now? How am I going to pay this bill? OK, maybe I skip my payments this month so I can pay this other bill I have.’ And it just basically makes their life into a perpetual triaging, like they’re in an emergency room or something.” That’s really why debt seems to be so pernicious, he says. “It creates this chronic strain.” And it is the chronic strain that carries with it real physical and mental challenges.

What about the lawyers?

What about the relationship between student debt, health, and lawyers? After all, at least in the United States, law is a postgraduate profession where students may have a better sense of the costs/benefits of the specialized degree—including the potential for significant postgraduate earnings. As documented previously in The Practice, many have examined the relationship between legal careers generally and health. And there are studies examining the impact of debt on lawyers’ careers broadly. For instance, in one study, Houle collaborated with Steven A. Boutcher, Anna Raup-Kounovsky, and Carroll Seron to determine if the University of California, Irvine School of Law’s tuition remission program (the first few cohorts enjoyed free and reduced tuition) resulted in law students choosing more government or public-interest careers. But what about debt, health, and lawyers? Studies from the American Bar Association and the Law School Survey of Student Engagement (LSSSE), both of which offer portraits of the impact of debt in lawyers’ lives at a moment of time, offer a grim picture.

The 2021 ABA Young Lawyers Division Student Loan Survey interviewed 1,300 newly graduated or licensed lawyers in the past decade, documenting how student debt impacts a host of aspects of their lives, including well-being. According to the report:

Over 70 percent of those with $100,000–$200,000, and over 80 percent of those with over $200,000 reported high or overwhelming stress. ­Sixty-five percent reported their total student loan debt or monthly loan debt obligation has caused them to feel anxious or stressed, and a little over half reported it has caused them to feel regret or guilt. These percentages also increased for respondents who reported higher levels of debt, including a majority of those with debt over $100,000 who agreed that their loan obligation has caused them to feel depressed or hopeless.

LSSSE looked specifically at the impact of student loan debt on vulnerable populations. “Although first gen and non-first gen students report similar stress levels related to law school (about 84% rank their stress a 5 or higher on a 7-point scale), two-thirds of first gen students say that financial concerns and student debt are a big source of stress or anxiety compared to less than half (46%) of non-first gen students,” the report details.

While Houle has not focused specifically on the impact of student debt on lawyers’ health, he sees reasons to be concerned about the debt that arises from graduate and professional training and health. Reporting from the Brookings Institute indicated that total graduate loan disbursements increased from $7 billion in 2012–2013 to $10 billion in 2019–2020, with more students attending graduate school, perhaps, the report suggests, as a result of what the job market demands. Limits on federal loans keep undergraduate borrowing within reason, but PLUS loans used for graduate school have no cap. For students in social work or teaching, where salaries are much lower than the entry-level salary at major corporate law firms, this causes concern.

Houle also notes that there is some evidence that forgiveness may be one tool that could alleviate health issues associated with debt. When National Collegiate, a student loan trust, failed to prove chain of title on a series of borrowers’ loans, it lost a host of collection lawsuits, effectively relieving $12 billion worth of student loans. Economists analyzed the data. “What you found,” Houle notes, “was that for the people whose loans were forgiven, you saw huge improvements to their well-being.”

In an era of debt-based higher education, any health gains associated with the increased knowledge and access higher education brings are not necessarily clear or straightforward. As Houle notes, debt can be a chronic stressor impacting both physical and mental health—for students, for young people, and for middle-aged adults. Should the cost of an undergraduate education—or a law school degree—be chronic strain?