60-Second Science

Debt Boosts Young People's Morale

People in their early to mid-20s actually felt that carrying debt was empowering. Christopher Intagliata reports

For most of us, owing thousands of dollars in student loans, all while juggling crushing credit card debt, probably sounds like a nightmare. But for people in their early to mid-20s, all that debt actually seems to boost their self-esteem—possibly because they consider that debt an investment in their future. So says a study in the journal Social Science Research. [Rachel Dwyer, Laura McCloud and Randy Hodson, "Youth Debt, Mastery, and Self-Esteem: Class-Stratified Effects of Indebtedness on Self-Concept"]

Researchers analyzed ongoing national survey data on 3,000 young Americans. The questions covered student loans and credit card debt, as well as some designed to measure the respondents’ self-esteem and sense of control over their lives. Even after accounting for the fact that more self-confident teens might be willing to take out more loans in college, the researchers found that the more debt respondents had, the more empowered they felt. Especially young adults from low-income families, who might have been afforded opportunities beyond their means.

But the honeymoon appears to end around age 28—right around the time when college grads have been working a few years and they realize their salary expectations may have been just a tad too high. Oh, and when the bills for those student loans start showing up.

—Christopher Intagliata

[The above text is an exact transcript of this podcast.]

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