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American Student Loans and Economic Pressures Report

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Updated: Apr 18th, 2021

Student loan debt ranks second in the United States after mortgage debt at $1 trillion (Schneider, 2012). This is an indicator that students are equally struggling to pay off this debt, and it is only likely that gainful employment is yet to be achieved. The main challenges of gainful employment are due to discrimination of minority groups. In the current world where the pursuance of education at the higher institution is not limited, gainful employment mainly depends on one’s field of study.

Texas has been pointed out as the nation with the best and most transparent data on average earnings and debt levels for graduates in the various programs. Efforts by the United States Department of Education to promulgate legislature on gainful employment is grounded on debt-to-earnings ratios. There is the emphasis from the Department of Education to work on ensuring students attain gainful employment after completing higher education. Increased participation in higher education is not commensurate with equal access to opportunities for everyone. In the case of overenrolled programs, employment prospects are scarce. Attainment of gainful employment is made difficult by the lack of recognition of degree certificates earned at institutions away from one’s home country.

Niemann and Maruyama 2005 (p. 408) consider educational achievement as a great equalizer because it is the main mode through which wealth is transferred across generations. Higher education is considered the key to intellectual and civic success in America. It is an acknowledged global fact that successful attainment of higher education credentials is associated with attaining societal accrued benefits by individuals through gainful employment (Harper, Patton & Wooden, 2009).

Unfortunately, this is not the case for all population groups, and especially the African Americans. Throughout the years, there have been efforts to try and close higher education gaps among the different races in America. However, it seems that exemplary education policies are not correlated with measurable success in higher education. Harper et al. (2009) demonstrate that the minority groups are on the losing end because racism seems to be a permanent fixture that defines society, including opportunities for gainful employment (Harper et al., 2009, p. 392).

The critical race theory is always challenging the ideologies, such as neutrality, objectivity, liberalism, meritocracy, and color blindness, which try to hide the true meaning constructed by society. The challenges of obtaining gainful employment upon attaining higher education have been aggravated by racial dominance versus racial subordination. The debate regarding higher education and the world of work has rapidly changed over time. During the 1960s, education was considered an important element in the success of the nation’s economy. Towards the end of the 1960s and the start of the 1970s, the positive perception of the relationship between higher education and employment began to fade as concern regarding the increasing number of students from higher education institutions grew (Teichler, 1999).

There is so much emphasis on graduation rates across America, but the high quality of life that is assumed to come with it is yet to be seen. This is since this emphasis is not backed with commensurate efforts to create more gainful employment opportunities. Even in contemporary society, employment of the minority groups, irrespective of their qualifications, remains a challenge. Gainful employment is far from being achieved because of the widening gap in the numbers of students from minority groups that attain their degrees in comparison to those from the majority groups.

In the current world, where the number of graduates exceeds the number of gainful employment opportunities, it is not clear what the education system is doing to ensure that students continue to be productive through innovation to create more employment opportunities. In relation to the deficit, questions have come up as to the higher education system’s capacity to meet future demands. The four dimensions by Teichler (1999, p. 170) critically analyze the higher education system concerning its ability to meet future needs.

The United States of America is under pressure due to the large student loans that thwart economic growth. As a result, the country has come up with regulations limiting access to federal funds by those institutions that fail to lay out the least debt-to-earnings and loan-default rate threshold (Harper et al., 2009). Failure to do so by the institutions providing higher education would only mean that these institutions are not doing enough to address the issue of gainful employment associated with lack of jobs and more low-paying jobs than high-paying ones.

There is limited research on the issues surrounding higher education now, and available literature on the historical association between higher education and gainful employment mainly indicates racial differences as the fueling factor. Gainful employment is an area that needs to be re-examined through a critical eye because it has been generally assumed that students get gainful employment after completing their higher education. There is a need to know how many students get into gainful employment after completion of higher education. Also, there is a need to distinguish the rate of gainful employment in relation to the type of higher education institution (college, university, and whether public, private, or proprietary).


Harper, S., Patton, L., & Wooden, O. (2009). Access and Equity for African American Students in higher Education: A Critical Race historical analysis of Policy efforts. The Journal of Higher Education, 80(4), 389-414.

Niemann, Y., & (2005). Inequities in Higher Education: Issues and Promising Practices in a World Ambivalent about Affirmative Action. Journal of Social Issues, 61(3), 407-426.

Schneider, M. (2014). Are graduates from universities gainfully employed? Analyzing student loan debt and gainful employment. American Enterprise Institute. Web.

Teichler, U. (1999). Research on the relationships between higher education and the world of work: Past achievements, problems and new challenges. Higher Education, 38, 169-190.

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