A Deeper Scrutiny into College Debt in the United States

Andrew Hyunseung Kim
12 min readJul 11, 2022


A Hurtful Blow to Some, a Deleterious Jab to Others — accelerating discrimination and economic insecurity

I have participated in a research conference in January last year, and I wanted to share my research paper proposal with a wider audience than just a few amazing professors I’ve shared this paper with. I have focused on the economic implications of college debt in the United States and have formulated a study that would expect to give results outlining the far-reaching effects of college debt.


1.1 The Issue of Student Debt

To some students, life after college goes smoothly as they find a job with a steady income and slowly work their way towards buying a house. On the other hand, seven out of ten students leave college with loan debt. As of 2020, over 44 million Americans are collectively in debt of 1.6 trillion dollars, making student debt a pressing crisis that cannot be ignored.

The problem associated with student loans has been addressed by many for centuries. Some institutions have come up with novel plans to alleviate students this burden. However, with more and more students going to college as a bachelor’s degree has become a prerequisite to finding jobs, it is predicted that more and more Americans will take out loans and fall into debt.

Over the past decade, student debt more than doubled, where the collective debt of Americans in 2009 was $772 billion, and by 2020 it reached an amount of $1.6 trillion. With the given trend of increasing Americans falling into debt, there is no doubt that the same trend will follow through in the years to come. Therefore, the purpose of this proposal is to accurately assess the real implications behind this continued increase in student loan debts, exploring how this phenomenon will adversely affect the loaning students and society as a whole.

This paper will highlight the seriousness of the problem through this analysis and propose possible recommendations to alleviate individuals and American society from this burden of loans.

1.2 Pressing Issue of Rising College Fees

The price of living will continue to rise, but the rate at which college tuition has risen is among the highest across all industries. While there are many contributing factors behind the rise of tuition, some major policy implementations regulating the relationship between the Federal and State government have created a reality where raising tuition has become an inevitable phenomenon.

In fact, during the Reagan Era, states passed Tax and Expenditure Limits (TELs). This restricted the amount of money a state government could spend. As a result, to supplement the restrictions, states looked for and implemented new ways for revenue, and rising college tuition was one of the policies enforced. Furthermore, the Reagan Administration drastically cut student aid and higher education funding, and college fees increased.

While many colleges and states have worked towards improving access to affordable education, these manifested in the form of greater access to different loan programs. Society became more demanding of higher education due to the sophistication and technical advancements required in the labor market. Against this demand, it became much more flexible for students to receive education through loans. This continued interaction of societal needs and lowered bar to funds have created an empire of student loans, serving as a problem for any individual, community, or national problem.

Many have acknowledged this problem, and programs have been implemented to alleviate this. However, as we have seen in the past century, tuition is continuously increasing, and more and more students enter the world of ‘student loans.’ This has intensified and diversified many of the issues prevalent in modern American society. Therefore, unless a practical measure is implemented to mitigate the collective debt of Americans, students will continue to suffer from a debt-driven life after college.

Furthermore, modern society’s sophistication will continue to widen the gap between the poor and the rich. Many of the promising labor positions require a minimum of a college degree. Although there are many student loan programs, the threshold is sometimes too high for students from low-income families. This, in return, will only intensify economic segregation between the poor and the rich.

2. Purpose and Significance of the Study

2.1 Purpose of the Study

The purpose of the study is to explore the many personal and social implications behind the continued accumulation of debts for students graduating from college. This analysis will be performed through both quantitative and qualitative methods. Furthermore, by exploring the specific burdens these students will face and the common social issues, this proposal will provide different solutions to address and alleviate the debt burden resulting from student loans. In particular, by focusing on decreasing the collective student debts of millions of suffering Americans, the paper conducts a holistic analysis of the different reasons and consequences behind this phenomenon.

However, most importantly, this research will explore the social, economic, and ethnic considerations behind this problem, identifying whether the problem of increasing student loans has other social implications like social injustice, race prejudice, and economic disparities. As you can see, the issue of student loans is not merely monetary. It affects all facets of the American culture, requiring logical, realistic, and implementable solutions and programs.

2.2 Significance of the Study: Racial, Gender, and Economic Discrimination

As society becomes more advanced and many demand highly qualified workers in the Fourth Industrial Revolution, college education’s popularity will continue to grow. This social demand entails that more and more will rely on different student loan programs to pay for their college education. To validate this background, millions of students go into debt annually, which can negatively sway their lives after college.

However, what is troubling is that this social phenomenon has different implications depending on one’s ethnic, social, and economic background: It is found that women and people of color are more prone to the dangers of this vicious cycle of student loans. Student debt creates more significant wealth disparities among men and women and white and black people as the handicap of borrowing more money puts them in a predicament after graduation.

For example, a white student who takes out a loan owes around $30,000, while a black student owes $34,000. While borrowing less, white students can pay back their debt much faster than black students; the former pay back at a rate of 10% a year compared to the latter at a rate of 4% a year. Significantly, this imbalance of wealth highlights yet another issue: the racial pay gap. With evidence laid upon us, it is to say that mitigating the racial pay gap will correspond to a lesser divergence of the debt and rate of pay between black and white students.

Black borrowers are not the only victims of inequality. While 56% of college students are women, they hold two-thirds of America’s total student debt. In 2019, women held $929 billion in student debt. Due to women’s lower wages, it is harder for them to pay back their debt than men. On average, women make as much as men with a lesser degree. For example, women with a master’s degree make as much as men with a bachelor’s degree. Along with the racial pay gap issue, another issue is underlined: the gender pay gap.

Furthermore, this study is significant not only because it highlights racial and gender inequality but because in the years to come, student debt defaults could lead to unfavorable consequences to the U.S. economy. The majority of borrowers pay back their debt by their 40s, and the Brookings Institute estimates that 40% of borrowers who entered college in 2004 will default on their loans by 2023. Extensive amounts of neglected college debt will indeed be reflected on America’s economy, which is why there needs to be a study done to analyze how these loans are impacting graduates and which groups are being impacted more than others.

2.3 Reasons behind the Gender Pay Gap

There are several reasons for the Gender Pay Gap phenomenon. While many advancements have been made to promote women’s rights over the past fifty years, the reality is still far from satisfactory. Despite the many numerical numbers speaking towards equality, the reality is far from it. Among the many different reasons, one of the most prominent issues about gender disparity resulting from the college debt phenomenon is that there are still more men with senior roles than women. As those with senior roles get paid more than those with junior roles, men are generally paid more than women.

Furthermore, even if women are provided with non-discriminatory access to the labor market (at least in theory), women’s wages decrease after childbirth: While many corporations guarantee to return to their table, the reality is different. Due to their absence, their presence within the corporation is reduced, and most of the time, they are forced to serve more menial jobs or even resign to take on less-skilled part-time jobs to take care of their children.

As demonstrated above, while on the surface, the issue of student debt seems to be none other than financial, upon scrutiny, there is evidence demonstrating a strong correlation to racial and gender issues. This is why the problem of college debt is a pressing issue in America. These issues cause millions of Americans to suffer more than others in the same situation merely due to their skin color or gender. Inequality is written worldwide when these repressed groups reach out for a loan to go to college, and many are disheartened even to attend.

3. Methods of Data Collection and Analysis

3.1 Methods of Data Collection

This paper will primarily be performed in the form of quantitative research. Therefore, it will refer to the published materials by the government, banks, universities, and other institutions to first develop an accurate database of the realities of student-loaned students in the United States. During this process, the research will look for existing literature discussing the relationship between student loans and the ethnic, cultural, and economic background of the students. However, suppose the identification of such direct information is impossible due to privacy issues; in that case, the research will examine separate literature on how race, gender, and economic conditions affect students’ college life and financial abilities.

Beyond these quantitative approaches, the research will employ a qualitative approach. For this, the research will develop a specific questionnaire distributed to students at different universities. The selection of universities will be based on their geographical locations within an urban setting as they best exemplify the effects of debts after graduation. Furthermore, the research will coordinate with different cultural, ethnic, and economic groups to share their perspective and experiences on this subject.

The questionnaire for this survey will be simple. The student will be asked about their race, ethnicity, gender, family income, city they plan to live in, and the amount they owe in college debt. A year and a half after graduation, the same students will be contacted to fill in information about the current rate at which they pay back their debt, the salary of their job, their credit score, whether they have a house, and their relationship status.

3.2 Methods of Analysis

The purpose of data collection on race, ethnicity, and gender is to perceive the changes in the mean amount of money owed by various groups. Moreover, after a year and a half, it can be examined how some ethnic and racial groups are better off than others. The motive for gathering information on family income is to collect data on how much money students borrow based on their family income. Furthermore, gathering information on the cities graduates plan to live in will reveal whether they live the impact of their social status.

The intent of questioning students about the rate of payment and salary is to understand how much of an impact student debt has on the job they were able to get. However, the purpose of knowing about their relationship status is to analyze whether more student debt correlates to less focus on relationships and family. The intent of gathering information on credit scores was to see how student debt negatively impacts graduates’ credit scores.

This comprehensive analysis considering various factors will provide insight into the impacts student debt has on students of various groups.

4. Expected Results and Impacts

4.1 Expected Results prior to Student Graduation

There are two parts to this study; first, the data collection on students as they graduate, and more importantly, the data collection on the same students after a year and a half of graduation.

The expected results of the study done on students before graduation would reveal that, on average, females take on more debt than males. Additionally, the study would shine a light on the least to most significant debt holders by race: Asians, then Hispanics, followed by whites, and finally, black people.

Regarding the difference in student debt by schools, the expected results would be that students attending private universities would be more likely to take out loans. However, they would take on more significant amounts of debt than the students attending public universities.

Surprisingly, the study revealed that students from middle-class backgrounds shoulder the most student debt; students with family earnings between $40,000 and $59,000 a year take on 60 percent more debt than low-income students and 280 percent more than students with families earning between $100,000 and $149,000 a year.

4.2 Expected Results after Student Graduation

The principal results of the study would unveil the negative impacts that student debt has on the lives of students a year and a half after graduation.

Firstly, it would be expected that graduates with considerable debt will be taking on low-wage and low-skill jobs, missing out on the benefits of a wage increase associated with having a degree; this will have a negative impact on the economy.

Moreover, facing the debt hurdle, those with neglected loan payments will be 36 percent less likely to purchase a house than those without a loan payment; these graduates are more likely to live with their parents. As buying a house builds long-term wealth, those with payments due will be missing out on this golden opportunity.

It is expected that students who took out more loans will have a lower net worth and credit score. Those with more debt will face increasing impediments after graduation, and they will stray from a successful road they would have otherwise taken if not for their outstanding debt.

4.3 Impacts of the Study

4.3–1 Illuminating Gender and Racial Inequality

The findings of the study will have several implications. First, it will shed light on the role of racial and gender inequality on the victims’ student debt. As it is revealed that women hold ⅔ of all student debt while making less money than men, society will no longer be able to feign ignorance about the gender pay gap. This spread of knowledge could lead to an increased number of advocates for more equality in the workforce, hopefully leading to the dissipation or diminishment of discrimination against women. As we already have the Equal Pay Act of 1970, legislatures might not play a role in dispelling discrimination and inequality, but awareness will play a huge role.

4.3–2 Increased Number of Scholarships

Furthermore, the study’s unfortunate impact will be that the revelations about the drawbacks of student debt may discourage low-income students from attending university. This will invariably lead to a more significant shortage of skilled workforce in the United States, an issue Americans have been facing since 1990. However, understanding this circumstance, universities may hand out more scholarships to dedicated low-income students like did the Singapore University of Technology and Design in 2019. The university offered a tuition grant to low-income students, which allowed them to access higher education, abating the gap of opportunities between low-income and high-income students.

4.3–3 Students making Wiser Choices

Finally, the study’s findings will encourage students to make wiser choices when choosing their college funding options. Unfortunately, students are taking out loans without considering the long-term consequences of their actions. However, as they would be more knowledgeable about the impacts of living with student debt due to this study, they would avoid attending universities that would force them to take out immense loans. To those students struggling financially, it would be of utmost importance for them to know that a more expensive university isn’t necessarily better or more suitable for them than a cheaper university. Attending a university with less financial burden may be wise in the long run.


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Andrew Hyunseung Kim

Interests in current events, social issues, research, and economics. Student at Singapore American School