Student Loan Debt Takes a Toll on a Vulnerable Population’s Mental Health

Thirteen years ago, Melanie Lockert, now age 38, thought she wanted to become a university theater professor. She was thrilled to start her Ph.D. journey in performance studies at New York University. Midway through, however, she realized that she did not want to work in academia but preferred nonprofit art education. After graduating with a master’s degree in theater performance, she searched for a job in art education in New York City. With the Great Recession of the late 2000s in full swing, however, she couldn’t find work.

By 2012 her undergraduate and master’s degree loans totaled $81,000, with a $900 monthly payment. After briefly going on food stamps, depleting her savings, sharing a one-room apartment with her partner in Portland, Ore. and hustling for temp work that paid around $10 to $12 an hour, she still struggled to satisfy her required monthly payments. “I felt completely trapped by my debt,” Lockert says.

Her anxiety surrounding her debt mounted. Lockert felt shame for going to “a fancy private school” and not being able to secure full-time employment. In 2013 she went into a deep depression. Lockert woke up every morning with a sense of dread for the day ahead. “I had graduated from N.Y.U., one of the most prestigious schools in the country, and I couldn’t find a full-time job to pay it back. I felt like my debt was mocking me,” she says.

Lockert says that students such as herself are told an untrue narrative: if you work hard in school, you’ll be able to pay back your loans. It’s a narrative, she says, “that’s increasingly false, especially in the wake of the Great Recession.” Young adults in the U.S. face the largest student loan burden in history. Loan debt averages $37,000 per borrower,  even as long-term wage growth has remained stagnant. And it’s taking a toll on young and middle-aged adults, who struggle to keep up and are saddled with debt.

Student loans are different from other forms of debt because unlike a mortgage, you can’t live in what you’re shelling out for—and unlike a car payment, the expense paid out doesn’t let you drive it to work. What you studied may or may not lead to a lifelong career. Many former students either don’t complete their coursework or decide to take a job in a field unrelated to their degree.

Whatever happens, early adulthood is bound to be an emotionally vulnerable time. According to data from the 2021 National Survey on Drug Use and Health, more than 18 percent of young adults had experienced a major depressive episode within the past year. That’s part of the reason why the Biden administration sought to relieve some of the strain with its plan to cancel up to $20,000 in debt for recipients of Pell Grants, which are given to students with the greatest need, and up to $10,000 for those who have not received Pell Grants but still qualify for financial assistance because they make less than $125,000 annually. In June, however, the Supreme Court found the administration’s efforts to provide this relief to be unconstitutional. The Court held that the administration can waive or modify existing regulatory provisions within financial assistance programs under the Higher Education Act of 1965, but it did not allow for full funding,  which must come from Congress. In response, the Biden administration tried another tack by announcing the Saving on a Valuable Education (SAVE) plan. It will use funding from the Department of Education to reduce the discretionary income that borrowers must pay each month toward their undergraduate student loans from 10 to 5 percent.

As these skirmishes play out, loan payments are set to resume on September 1 after a three-year pause during the COVID pandemic. Even though payments have not yet resumed, borrowers’ stress levels have consistently remained high. A study published in the Journal of Evidence-Based Social Work analyzed 85,664 comments from Twitter and Reddit on student loan debt and mental health from 2009 to 2020. Researchers found high levels of mental health issues, including depression, anxiety and fear and anger associated with the loans. “It seems like a mountain too high for students, many of whom reported not having jobs,” says Gaurav Sinha, an assistant professor of social work at the University of Georgia, who was lead author of the study.

Another study, published in April 2023 in the journal Addictive Behaviors, followed 331 college graduates and linked high debt levels with problematic drinking, anxiety and depression, especially among the most economically insecure graduates. In some cases, borrowers even expressed suicidal thoughts. Similarly, a March 2021 survey from the financial services company Student Loan Planner found that one in 14 participants within a group of about 2,300 loan borrowers with a high level of debt reported having suicidal thoughts that they attributed to that plight.

Student loans have a particularly jarring impact on mental health because they affect a borrower’s life in unexpected ways, contends Marlene F. Watson, a psychologist at the Ackerman Institute for the Family in New York City. Loans force couples to delay major milestones, such as getting married, buying homes and having kids, until much later than originally planned. “Student loans serve as a barrier when you’re trying to build a life,” Watson says. In many cases, they can impact whether you can get a mortgage for a house. And for impoverished students who can’t rely on help from their parents, it makes the prospects of escaping a sea of red ink even less plausible. “The dreams they had about what education would bring don’t match their reality,” Watson says.

Some young people struggle more than others. The burden falls on Black borrowers more heavily. According to the White House, two decades after college, “the typical Black borrower who started college in the 1995-96 school year still owed 95% of their original student debt,” and many end up without a degree. Black borrowers struggle to repay their debt more than white borrowers, according to a June 2022 report from the Education Trust. Victoria Jackson, assistant director of Higher Education Policy at the Education Trust and co-author of the report, attributes the disparity to the racial wealth gap: the median Black household has accumulated $24,100 in net worth, compared with the median white household, which has $188,200. 

Black borrowers are left with fewer resources to pay for college and to pay back loans, while at the same time, they face discrimination and harsher terms when seeking a loan. “Black borrowers aren’t able to put away money for their kids to go to college or help with repayment while Black students face a racial wage gap and discrimination in the labor market,” Jackson says. All these factors intensify the mental health strain. According to the Education Trust report, 64 percent of those surveyed said that student debt negatively impacts their mental health.

For-profit institutions, such as DeVry University, Capella University, Strayer University and the University of Phoenix, pose the most problems for student borrowers, who must take out much higher loans than those who attend a four-year public school. And these borrowers often end up without a degree, says David Feldman, a professor of economics at William & Mary (and author of the book Why Does College Cost So Much?). Only around 23 percent of students at the more expensive for-profit colleges—often targeted at people from impoverished backgrounds—graduate within six years.

Additionally, students who, like Lockert, get master of arts (M.A.) degrees often end up saddled with huge loans without high-salaried jobs to pay them back, Feldman says. He adds that the data show that law, business and medical degrees may be costly, but graduates with these degrees are much more likely to end up with better-compensated jobs. “M.A.s have become the cash cows for schools that want to raise lots of money,” Feldman says.

In retrospect, Lockert wishes that she hadn’t wasted so much money on her M.A. It nearly bankrupted her and sent her into a deep spiral of depression and hopelessness. But she is one of the lucky ones. In 2013 she started a blog called Dear Debt, which led to a career in freelance writing that, two years later, provided her with the financial independence to pay off her loans. Lockert says that the response she’s gotten to her blog from readers has been dramatic. She says that she gets e-mails all the time from people who feel intense anxiety and stress because of their debt, and some, she says, have considered suicide. This is an indication of how many people are saddled with similar loan-related problems. Far too many of them are suffering in silence, Lockert says. “These payments quite literally keep you tethered to the past, making it tough to move forward and think about your future,” she adds.


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