Is student loan debt good or bad for full-time employment upon graduation from college?

Abstract

Student loan debt represents an important phenomenon in the United States, as around 61% of bachelor's degree recipients graduate with a debt of over $28,100. Although studies emphasize that holding student loan debt delays the transition to adulthood in terms of marriage and home ownership, little is known about its impact on employment and this limited research offers, at best, equivocal evidence. The current study draws from Conservation of Resources theory to argue that student loan debt acts as a major financial stressor for new labor market entrants during job search. Using archival data from 1,248 graduating seniors from 4 geographically diverse universities in the United States collected in the context of a prospective study design, we found evidence for 2 countervailing mechanisms through which student loan debt may influence full-time employment upon graduation. On the one hand, college students who had student loan debt were more likely to experience financial strain, and subsequently more job search strain, which was negatively related to college seniors' odds of securing full-time employment upon graduation. On the other hand, this financial strain was also positively related to students' work hours while in the last semester of college, which was positively related to their odds of securing full-time employment upon graduation. Further mediation tests revealed that only the 3-stage indirect effect through job search strain (i.e., student loan debt ¡ financial strain ¡ job search strain ¡ full-time employment) was statistically significant. The theoretical and practical implications of these findings are discussed.

Developing and Testing a Model of Dynamic Changes in Work–School Conflict and Workplace Deviance Over Time

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“…We used the InCharge Financial Distress/Financial Well-Being Scale (Prawitz et al, 2006 ), a widely used measure (Brüggen et al, 2017 ; Froidevaux et al, 2020 ), to measure financial well-being. It has sound validity and reliability (Froidevaux et al, 2020 ; Prawitz et al, 2006 ). Scores based on the average of summed responses to the eight items (e.g., How do you feel about your current financial situation?)…”

Feeling Trusted or Feeling Used? The Relationship Between Perceived Leader Trust, Reciprocation Wariness, and Proactive Behavior

“…The resources owned by employees will affect their proactive behaviors. 30 As an important individual resource, the sense of self-worth is an essential factor that may affect employees’ initiative and proactive behavior. Previous studies have also shown that employees with a high sense of self-worth will engage in more proactive behavior.…”

Exploring the impact of a conspicuous identity on college students’ campus loans: Evidence from China

“…The literature has shown that campus loans have brought about a series of social problems. For instance, credit card loans are associated with wide-ranging adverse health indicators in college students ( Nelson et al, 2008 ), force students to reject or significantly delay marriage ( Haneman, 2017 ), hinder entrepreneurship ( Krishnan and Wang, 2019 ), and influence their full-time employment upon graduation ( Froidevaux et al, 2020 ). Some studies have explored the factors leading to credit card debt.…”