Student Loan Debt and Financial Stress: Implications for Academic Performance

• Published in: Journal of college student development Vol. 60; no. 1; pp. 115 - 120
• Main Authors: Baker, Amanda R, Montalto, Catherine P
• Format: Journal Article
• Language: English
• Published: Baltimore Johns Hopkins University Press 2019
• Subjects: Academic Achievement; College students; Debt (Financial); Ethnicity; Financial Problems; Gender; Gender Differences; Grade Point Average; Higher education; Loanwords; Minority & ethnic groups; Outcomes of Education; Race; Racial Differences; Researchers; Stress; Stress Variables; Student Costs; Student Loan Programs; Student loans; Student retention; Trends; Undergraduate Students
• ISSN: 0897-5264; 1543-3382; 1543-3382
• DOI: 10.1353/csd.2019.0008

With the costs of college on the rise across the United States, many postsecondary educators are concerned about the potential effect of financial strain on student outcomes. Scholars have long hypothesized that students who are concerned about finances may demonstrate lower goal commitment, academic engagement, and persistence (Boatman & Long, 2016; Cabrera, Nora, & Castañeda, 1992; Nora, Barlow, & Crisp, 2006). High levels of student loan debt and financial stress have been associated with increases in students' likelihood of dropping out, stopping out, or reducing their course loads (Dwyer, Hodson, & McCloud, 2013; Joo, Durband, & Grable, 2008; Robb, Moody, & Abdel-Ghany, 2012). Financial concerns have also been linked with extended time to degree (Letkiewicz et al., 2014), which can further escalate the costs of college. Trends in student borrowing and financial stress vary between racial and ethnic groups and by gender, pointing to possible inequities in financial support for college. This article examines how both objective and subjective indicators of financial concerns were associated with academic performance. First, the authors examined whether expected student loan debt and subjective levels of financial stress were associated with academic performance after 1 year, controlling for prior grades and demographics. Then, the authors examined interaction effects to determine whether the academic implications of financial concerns differed on the basis of race/ethnicity or gender.