With seven in 10 college graduates owing on student loans after they get their diplomas, many graduates are finding how much they owe is a driving force in their job selection. A study from a nonprofit group, American Student Assistance, revealed that over half of people who have student loans say their debt load was a major factor in the career path they’ve taken.
How Do Student Loans Impact Career Choice?
Students may find after graduation their field of study isn’t as lucrative as some other job opportunities they can land. Although their hearts may not be in their non-major job offer, they have to make their student loan payments somehow. So some graduates are accepting jobs they have no passion for just to pay the bills.
Not surprisingly, the higher the debt, the greater the odds a person will take a job outside of their field just to be able to pay the bills. While 38 percent of graduates with debt of $12,000 or less end up taking a job outside of their field of study, that number increases to 60 percent when a graduate has racked up more than $100,000 in student loans, according to SavingForCollege.com publisher Mark Kantrowitz.
“You go to a more expensive college, supposedly the best in your field, but take on too much debt, so you can’t work in your field because of the need to repay the debt,” Kantrowitz told CNBC.
Career choices aren’t the only aspects of a person’s life being impacted by student loan debt. Some graduates are delaying beginning families and buying homes because of their debt load, too.
How Graduates Can Avoid This Trap
With some careful planning, graduates can learn to minimize and manage their student loan debt so it doesn’t affect their career choices.
The first step can be considered while selecting a college. Instead of signing up for a four-year university, there is the option of going to a much cheaper community college for the first year or two before transferring to a four-year university. You can also apply to colleges that offer more financial aid in the form of scholarships, grants, and work-study.
For students who are about to graduate and are only now realizing how much they will owe in student loans, there is still hope. To help chip away at that debt, a person can supplement their income with a side gig. That extra income can potentially allow them to pursue their dream job while not defaulting on their student loan.
In addition, there is the possibility ofrefinancing their student loans for a lower interest rate, which can trim their monthly payment.
If the size of the monthly payment is what’s stopping a person from taking an entry-level job in their field, they can look into lowering their payment through an income-driven repayment plan. With this type of repayment plan, a person’s monthly student loan payment is based on their income. This kind of plan can help people avoid defaulting on their student loans and still pursue the career they want.
Author: Shannon Serpette
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