Short Title

The Effect of Educational Debt on Career Choice


This study reviewed the literature to investigate the impact of student loans on career choices, in order to provide implications for policy makers and researchers with respect to student loan policy. For this purpose, empirical studies in peer reviewed journals since 1985 were analyzed. This review explored the results of empirical studies regarding the relationship between debt and career choice in three areas: 1) general career choice, 2) specialty choice in particular fields such as law and medical school, and 3) the decision to pursue an advanced degree. The results suggest that educational debt generally has no clear negative effect on career choice. Nonetheless, the possibility that educational debt could decrease social equality and generate market distortion was suggested. Finally, this article discussed five main factors in need of more thorough investigation: 1) new data sets, 2) psychological variables associated with career choice, 3) methods, 4) a specific group, such as minorities, lower class families, and women, and 5) the characteristics of loan programs.