By: Sally A. Kakoti, MSW
Mark 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.
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 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.
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 workers are also using credit cards for more than just educational expenses, and many are unable to afford the monthly payments. In one case, a social worker in New York was unable to pay her credit card bills and was taken to court by collection agencies. In another instance, a social worker reported feeling as if she was inside a “financial storm” with $30,000 in credit card debt to repay.
Debt relief and financial aid resources
On the positive side, many resources are available to assist social work students and practitioners in paying for college and reducing debt. Resources and education on improving personal finance from government Web sites, community college courses, university extension classes, and adult school may help social workers to learn how to manage educational and credit card debt. Many federal and state programs to reduce student debt may be available to social work students and practitioners. Social work students may be eligible for student loan forgiveness programs once they become employed and meet the criteria of a debt-relief program. The National Health Service Corps Loan Repayment Program (NHSC LRP), Higher Education Reauthorization and Opportunity Act of 2008 (HEA), and the National Institute of Health (NIH) Loan Forgiveness for Researchers (LRP) are a few programs that have provided such help.
A few states offer stipends to social work students who choose to pursue a specific concentration (such as child welfare or mental health). The Title IV-E program provides social work students admitted to Council on Social Work Education (CSWE) accredited schools of social work a stipend to focus their studies and career on public child welfare. The state of New Jersey offers the Social Services Student Loan Redemption Program, which provides social work students loan redemption if they work in direct service for specific social service agencies. Until recently, Florida provided the Florida Child Welfare Student Loan Forgiveness Program. Check with your own state for the most up-to-date information about these and similar programs.
Financial aid in the form of scholarships, grants, and work-study is also available to social work students. The John A. Hartford Foundation and the Gerontological Society of America (GSA) offer social work students interested in pursuing a career in gerontology various scholarships and fellowships. The National Association of Black Social Workers provides several tuition and book scholarships ranging from $250 to $2,000.
The Council on Social Work Education (CSWE) offers the Carl A. Scott Book Scholarship of $500 to social work students from ethnic minority backgrounds. The National Association of Social Workers (NASW) offers various fellowships and scholarships each academic year. For example, the Verne LaMarr Lyons Scholarship is available to a master’s level social work student committed to a career working in the African American community. The Consuelo W. Gosnell Memorial Scholarship is available to a master’s level social work student committed to working with Hispanic and American Indian populations or the nonprofit and government sectors. A $500 scholarship award for an essay on commitment to social work service and advocacy is available to a junior, senior, or master’s level social work student with a 3.25 GPA or higher each year.
General financial aid is available and is based on financial need. The U.S. Department of Education provides information on federal student aid programs, grants, and loans, as well as other helpful information about college applications and loan repayment options.
A helpful resource for searching for scholarships is Fastweb, a free personalized scholarship search engine that matches users’ profile specifications with appropriate scholarship and grant awards. Work-study is another financial aid resource available to students who demonstrate financial need by completing the Free Application for Federal Student Aid (FAFSA). Through the work-study program, a student’s wages are paid in part by the federal government and in part by the student’s employer.
It is clear that social work students and practitioners are at risk for carrying large amounts of educational and credit card debt. To make sound financial decisions before, during, and after college, social work students and practitioners need to explore all of their financial options while fully understanding the consequences of carrying high amounts of debt. By taking advantage of financial assistance and education, social work students and practitioners can learn to successfully manage and even avoid debt altogether.
A healthy financial life ultimately allows social workers, like Mark and Stacey, to build a healthy, happy family.
Blank, B.T. (2010, Fall). Loan forgiveness eases debt burden for new social workers. The New Social Worker. Retrieved from http://www.socialworker.com/home/Feature_Articles/General/Loan_Forgiveness_Eases_Debt_Burden_for_New_Social_Workers/.
National Association of Social Workers. (2004). Selected loan debt of social work students by state. Retrieved from http://www.socialworkers.org/advocacy/updates/2004/042204.asp.
Pew Charitable Trusts (2006). Student debt means many new graduates can’t afford to be teachers or social workers. Retrieved from
Whitaker, T. (2008). In the red: Social workers and educational debt. NASW membership workforce study. Washington, DC: National Association of Social Workers.
American Student Assistance. (2011). Student loan debt statistics. Retrieved from http://www.asa.org/policy/resources/stats/default.aspx.
Reed, M., Asher, L., Abernathy, P., Cheng, D., Cochrane, D.F., & Szabo-Kubitz, L. (2011). Student debt and the class of 2010. Retrieved from http://projectonstudentdebt.org/files/pub/classof2010.pdf.
Rowley, L. (2011). 3 tips for cleaning up your finances after a credit card debt storm. Daily Finance. Retrieved from http://www.dailyfinance.com/2011/11/07/3-tips-for-cleaning-up-your-finances-after-a-credit-card-debt-st/.
Silver-Greenberg, J. (2010). Boom in debt buying fuels another boom in lawsuits. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424052702304510704575562212919179410.html.
Sally A. Kakoti, MSW, graduated from UCLA in 2007. She worked in South Los Angeles as a development associate for the Watts Labor Community Action Committee (WLCAC) for several years. Currently, she is part of an interstate collaborative examining economic empowerment and social work. She is interested in debt literacy, financial capability, and economic development (asset-building) for low income populations, social work practitioners, and social work students.
This article appeared in the Winter 2013 issue of THE NEW SOCIAL WORKER. Copyright 2013. All rights reserved.
Editor's Note: This article was corrected on January 7, 2013.