EDUC 1100 Research: How Student Loans Affect University Choices

This essay examines the significant impact of student loans on students' choices of universities and their access to higher education. It delves into the rising costs of post-secondary education and how student debt influences decisions, potentially limiting options to lower-cost institutions. The paper explores various aspects, including the financial stress associated with student loans, the debt burden's effect on graduate school enrollment, and the psychological impacts of debt aversion. It also considers counterarguments, such as loan forgiveness programs, and supports its arguments with research from multiple articles and studies. The conclusion highlights the negative influence of student loans on students' university choices, emphasizing the economic factors that shape their decisions and the importance of financial aid and scholarships in promoting access to post-secondary education. The essay is intended for EDUC 1100 and uses APA format.

Running head: SECONDARY EDUCATION AND FINANCE
Secondary Education and Finance
Student’s name
University
Author’s note

1SECONDARY EDUCATION AND FINANCE
Introduction
The latest statistics shows that, as of 2020, the cumulative amount of student debt has
reached a staggering $1.6 trillion in the United States alone. The magnitude of the amount
clearly points to the seriousness of the ongoing student debt crisis and its impact on the overall
economy. The worldwide debate over the American student debt crisis has compelled scholars of
various fields to examine the current scenario as well as impacts of the student loan across all
demographics and social strata. Along with its impact on economy and job market, researchers
maintain that taking on student loan has deep impacts on several other social as well as personal
issues. One of the most pertinent objection against the practice suggests that the amount of
student loan limit the students’ choice of post-secondary educational institute. However, there
are significant counterarguments that refute the claim. Hence, in the present research, an attempt
will be made to explore the various ways subsequent to availing student loan that impact the
students’ choice of university. On the very outset of the issue, it is evident that an existing
student loan will restrict students to choose any premium university for higher studies, as it
would incur more cost on top of the existing debt. Hence, the study hypothesizes that student
loan amount, in all probability, may affect the students’ choice of university, or the opportunity
of higher studies altogether in a negative way.
Discussion
i. First Issue: Cost of Post-secondary education
In the article Student Loans, Financial Stress, and College Student Retention (Britt et al.,
2011), the authors explores the factors of student debt and the subsequent financial stress, which
allegedly have a deep impact on student retention in higher studies. The study conducts an

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examination of 2475 undergraduate students to determine the influence of the economic stress
which might in turn influence the students’ decision for pursuing further education. The research
points to certain pertinent facts regarding the issue, such as:
 The cost of post-secondary education has skyrocketing to such an extent that it is deterring
the youth from pursuing higher degrees.
 Study indicates that students availing high amount of student loans are likely to discontinue
post-secondary degree, or not pursue at all due to the perceived incurrence of financial
burden.
 Due to the loss of private endowment and cut down in government supports, colleges and
universities have been compelled to increase tuition to sustain infrastructure, instruction and
student services. Subsequently, students especially from middle and lower middle class are
opting out of premium institutes with inflated education cost.
 The increase of federal and state financial aid for students since 2015 has led to improved
student retention as well as positive student participation in post-secondary education.
ii. Second Issue: Debt burden governs the choice of participating in post-secondary
education
Researchers Malcolm and Dowd (2011) in their paper The Impact of Undergraduate
Debt on the Graduate School Enrollment of STEM Baccalaureates, explore the definitive
margin of student debt by determining the standards for loan repayment. The authors
emphasize the negative relationship between student debt and graduate school enrollment
to establish the notion that inflated cost of higher education discourage students to pursue
post-secondary degrees, especially in the students holding a bachelor’s degree in the

3SECONDARY EDUCATION AND FINANCE
STEM field. To establish the hypothesis, the study points out several arguments in
support of their claim, such as:
 Students obtaining bachelor’s degree from a high-priced institution are likely to carry a
heavier debt burden, and thus opting out of post-graduate degrees as compared to low-priced
institutions.
 The study shows that there is a relatively higher chance of college participation among non-
borrowing baccalaureates in the STEM field than their borrowing counterparts.
 Federal financial aid policies have increased college participation of students from low
income group and underrepresented racial-ethnic backgrounds.
iii. Third Issue: Stress of student debt barring students from pursuing post-secondary
education
In the article Does Student Loan Debt Deter Higher Education Participation? New
Evidence from England, the authors Callender and Mason (2017) explores the direct relation of
student debt and student retention in higher studies. They argue that many students, irrespective
of the amount of student loan they owe, are likely to refrain from applying to universities due to
the psychological stress and fear of student debt. Comparing a 2015 survey of prospective
undergraduates with that of 2002 undergraduates, they bring out the negative attitude towards
student loan among students. The research shows that:
 Students from higher economic class are more likely to opt student loan than their counterpart
from lower income group.
 The aversion to student loan has increased during 2002 to 2015, an attitude the researchers
attribute to the perceived aftereffects of debt crisis in future professional life.

4SECONDARY EDUCATION AND FINANCE
 The attitude of debt aversion has a huge impact on the students’ decision of choosing higher
education, more specifically deterring the plans for pursuing higher education among lower
class students.
iv. Counterpoint: Opportunity of loan forgiveness
McKinney and Burridge (2014) argue that the decision of not pursuing higher education
does not solely depend on the stress factors of student debt, as there are provisions of exemption
of student loans, Income based repayment methods etc. to relieve students from the economic
burden.
Conclusion
In the light of the arguments presented by the aforementioned articles, it is evident that
the inflation of education cost and the negative impact of student debt in the professional as well
as personal life in future discourage a number of students from pursuing a higher educational
degree. Even if they pursue a post-secondary degree, they often tend to choose from low-cost
institutions rather than desired institutes. Although there are provisions of loan wavering and
easy repayments, the imminent stress discourage students, especially from the lower income
groups, to take up the burden. The increase of student participation in postsecondary courses,
aided by federal and state scholarships confirms the economic factor behind the college
participation or the choice of institutions among students. Hence, it can be concluded that the
negative impact of student loan indeed influences students’ choice of university education.

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References
Britt, S. L., Ammerman, D. A., Barrett, S. F., & Jones, S. (2017). Student loans, financial stress,
and college student retention. Journal of Student Financial Aid, 47(1), 3.
Callender, C., & Mason, G. (2017). Does student loan debt deter higher education participation?
New evidence from England. The ANNALS of the American Academy of Political and
Social Science, 671(1), 20-48.
Malcom, L. E., & Dowd, A. C. (2012). The impact of undergraduate debt on the graduate school
enrollment of STEM baccalaureates. The Review of Higher Education, 35(2), 265-305.
McKinney, L., & Burridge, A. B. (2015). Helping or hindering? The effects of loans on
community college student persistence. Research in Higher Education, 56(4), 299-324.