Project 2.4

The effects of student loan debt on graduates' financial and life decisions in the UK and USA

The aim of this project is to investigate the effects of rising graduate indebtedness on graduates’ life choices in the US and England.

Project team

  • Claire Callender, UCL Institute of Education / Birkbeck
  • Stephen DesJardins, University of Michigan
  • Ariane de Gayardon, UCL Institute of Education
  • KC Deane, University of Michigan


The increasing use of student loans to fund HE is a global phenomenon, fuelling HE expansion and participation, and social mobility. The policy goals of loan schemes around the world vary. In the US and England the central objective is cost-sharing.

In both countries loans seek to reduce public/state expenditure by shifting HE costs away from government and taxpayers so more of the costs are borne by students and/or their families. Simultaneously, loans facilitate, and make more acceptable, tuition fee increases.

The rebalancing of private and public/state contributions toward HE costs, especially since the 2008 global recession, has led to: higher tuition fees; student funding systems predicated on the accumulation of student loan debt; a majority of undergraduates dependent on loans to fund their studies; and far higher levels of graduate debt – all developments predicted to continue in the future.

Concerns about the scale of graduate debt and loan recovery have prompted changes in the design of student loan repayment mechanisms in the US. This and the recent HE reforms in England herald policy convergence, and make a comparative study particularly timely.

What is unknown are the longer term implications of rising indebtedness on graduates’ life choices, and the extent to which the loan repayment structures may influence these. No research on this topic has been conducted in England, while US research focuses rather narrowly on the links between debt levels and graduate financial, physical and emotional wellbeing.

Globally, loans may be a necessary instrument for status attainment and social mobility, but locally, how does the changing societal order of rising indebtedness affect the lives of young adults alongside broader structures of inequality and the political economy of contemporary society?

Policy implications

The key policy area this study addresses is student funding and finances, particularly student loans both in the UK and the US.


Start date: 1 April 2017
Completion date: 1 April 2020