The New Social Worker Vol. 20, No. 1, Winter 2013 | Page 16

Educational and Credit Card Debt: What’s a Social Worker To Do?
by Sally A. Kakoti, MSW

M

ark and Stacey, both master’s level
social workers, live in an urban
area. They both have steady jobs—
Mark works as a mental health clinician for a
foster care home, and Stacey is an outpatient
therapist at a local clinic for adults who suffer
from severe mental illnesses, such as depression
and schizophrenia. After a few years working
in the field and gaining some stability, Mark
and Stacey are thinking about starting a family. “We were discussing when to have kids...
and we decided we want to give our children
a solid start by putting money aside for their
college education,” says Mark. Although Mark
and Stacey’s financial goal is commendable,
they are far from achieving it. Part of their
financial challenges began in college—Mark
and Stacey funded almost 100% of their
undergraduate and graduate education with
loans. “We were hoping we could pay off our
loans with just our salaries, and we thought
a graduate degree would give us a bit more
income, but at the end of the day, we’re now
more than $240,000 in debt,” says Stacey.
She graduated in 2009 with $41,000 in private loan debt and could only afford to make
the monthly minimum payment. Three years
later, instead of having reduced the $41,000,
she now owes $48,000 on the loan because of
the interest. Mark and Stacey proclaim they
love their jobs, but their burden of debt has
them thinking twice about having children.
When Mark and Stacey sat down to financially plan a family, they realized they would
be almost 70 years old before their student
loans were paid off—making the financial feasibility of having a child and saving for that
child’s college education utterly impossible.

Educational debt

Although not every social worker
has a story as dramatic as Mark and
Stacey’s, it is clear that debt is a growing
concern for today’s social workers, and
it often begins in college. In 2004, the
National Association of Social Workers (NASW) released a report on the
educational debt of social work students
and found debt as high as $80,000 per
student. In the 2007-2008 academic year
alone, more than 72 percent of master’s
level social work students took out loans
to pay for their education. On average, a
social work graduate student owes more
than $35,000 for just one year of study.
When we combine undergraduate and
graduate social work students, more than

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The New Social Worker

77 percent borrowed more than $49,000
to pay for school. Another 37 percent
of social work students who graduated
from a public college and 55 percent
who graduated from a private college
could not afford to make the minimum
payment on their student loans (Pew
Charitable Trusts, 2006).

Unfortunately, social work practitioners are in a similar position. According to Tracy Whitaker, director of the
NASW Center for Workforce Studies,
social workers may owe more in student
loans than they will earn in their first
year of employment after graduation.
In fact, because social workers typically
start out earning low salaries, paying off
debt becomes even harder.

Salary data on social workers’ earnings paint a dismal picture. The median
salary in 2010 for social workers was
$42,480, according to the Occupational
Outlook Handbook, while U.S. News and
World Report reported the highest paid
social workers earned $68,030 and the
lowest paid earned $26,170.
Another 41 percent of social
workers in debt were the primary breadwinners of their
households, and more than
53 percent said they had student loans that totaled more
than their annual salaries.
A shocking 25 percent said
their educational debt was
more than twice their yearly
salary. Not surprisingly,
when asked to rate the reasonableness
and manageability of their educational
debt, 48 percent of social workers said
their debt was “unreasonable,” and 20
percent said their debt was “unmanageable” (Whitaker, 2008).

Although social workers may have
pursued their profession with a passion
for helping others, high student debt and
low earnings may put social workers in a
position of financial trouble. Social workers may not be able to afford to build
assets, such as purchasing a home, saving
for retirement, and building an emergency fund. The stress of high debt and low
wages may also force knowledgeable and
skilled social workers to abandon their
profession for non-social work jobs that
pay more.

Winter 2013

Credit card debt

Low salaries may not be the only
obstacle for social workers trying to keep
up with student loan debt, building assets, and the cost of living. Unfortunately, many social workers are also deep in
credit card debt. With the rising cost of
education, student loans alone are not
always enough to cover expenses beyond
tuition. Social workers have turned to
credit cards to pay for books, gasoline,
and other daily necessities to make it
through their college years. According
to research, roughly 31 percent of social
workers used credit cards to pay for educational expenses beyond tuition (Blank,
2010; Whitaker, 2008).

Intae Yoon, a professor of social
work at East Carolina University, surveyed bachelor’s and master’s level social work students on how they paid for
their education and approximately how
much debt they had at graduation. He
found that credit card debt is a serious
concern for social work students—more

than 11 percent of bachelor’s level social
work students reported having more than
$10,000 in credit card debt at the time
of graduation (Blank, 2010). Another 42
percent stated their ability to use credit
cards was either a “very” or “extremely”
important part of financing their education. The case of master’s level social
work students is similar. Approximately
20 percent of the master’s level social
work students reported that credit cards
were “very important” in terms of paying
for their education, whereas another 16
percent reported owing a minimum of
$10,000 in credit card debt by the time
they graduated (Blank, 2010).

Social wor kers are also using credit
cards for more than just educational
expenses, and many are unable to af-