How student loans are making some people abandon their dreams

Jonathan Alcorn | Bloomberg | Getty Images

Student borrower looks for a job.

Mary O'Mara is worried about her son.

Every day, the 27-year-old man comes home from his job as a supervisor at a big-box retailer, heads right to his bedroom, and then doesn't emerge again until the morning.

"He just sleeps," O'Mara, 62, said. "He's so depressed."

That's because his life wasn't supposed to unfold this way. At Rutgers University, he majored in marine science and minored in environmental protection policy. On internships, he traveled to Barbados and fought to protect turtles from poachers; in Key West, Florida, he nursed sick dolphins back to health. "From a child, he loved the ocean," O'Mara said. "He's a really smart kid."

When he graduated college, he was offered a position in Florida, training dolphins. He was thrilled, until he saw his monthly student loan bill: more than $1,000.

"That's when he broke," O'Mara said. Instead of following his dreams, he now works as a supermarket manager (where he makes a higher salary than he would as a trainer) and lives at home. "He thinks his life is over," O'Mara said. "He's twenty-seven and he thinks his life is over."

Student loans are having a perverse effect, according to a sparse, but building, body of research. The very debt that's taken on to allow one to pursue their dreams can later morph into a burden that requires them to then abandon those plans and grab a job that will just pay the bills.

Seven in 10 college graduates are in debt from their education. Americans are now more burdened by education loans than they are by credit card or auto debt. And more than half of student loan borrowers say that debt informed their career choice, according to a study by American Student Assistance, an educational nonprofit.

In a working paper not yet published, two economists calculate that students with debt tend to be less choosy in their careers. An additional $2,500 in education loans brings down an individual’s likelihood of being employed in a job closely related to their major by almost 5 percentage points, they found.

"It is unfortunate that perhaps debt is making it hard for people to take jobs that have low pay but high non-monetary returns such as those in public service," said Nicolas Ziebarth, a co-author of the study and an associate professor of economics at Auburn University.

LorriAnn Sanchez knew she wanted to be a journalist since she was eight years old.

"I just knew that I was meant to tell people stories," she said. Throughout college and after, she worked for multiple newspapers in New Jersey. Along the way, she said she interviewed political candidates and won press awards.

But her more than $70,000 in student debt weighed on her. "I realized that I wasn’t going to be able to live on $35,000 a year," said Sanchez, 54. "I quit the newspaper."

Now she works in medical writing for a pharmaceutical company, and the memories of what she gave up still bring her pain.

"It sucks to know what you’re supposed to do but to know you have to give it up because you can’t survive," Sanchez said. "It's devastating to me. If someone had said you can do this without all these loans, I would have done it."

Mark Kantrowitz, the publisher of SavingForCollege.com, analyzed U.S. Department of Education data to look at how student debt informs people's working lives. More than 60 percent of people who owe more than $100,000 for their education take a job outside of their field, compared with just 38 percent of those who owe $12,000 or less, he found.

"It's absolutely ironic," Kantrowitz said. "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."