Journal of Family and Economic Issues

, Volume 40, Issue 1, pp 74–85 | Cite as

Financial Socialization, Financial Education, and Student Loan Debt

  • Lu FanEmail author
  • Swarn Chatterjee
Original Paper


This study examines the role of financial socialization, financial knowledge, and receiving financial education on student loan repayment behaviors and related financial stress, as reported by the participants. From an analysis of the 2015 National Financial Capability Study dataset, we find that individuals who received financial education in an academic or professional setting were less likely to be late on student loan payments or worry about their student loan debt. Additionally, those who received both financial education and learned about finances from their parents were even less likely to worry about their student loan debt. The broader implications of the main findings for financial counselors, therapists, and planners are also discussed.


Financial socialization Financial education Student loan debt Financial behavior Financial stress 


Compliance with Ethical Standards

Ethical Approval

This article does not contain any studies with human participants or animals performed by any of the authors.


  1. Anong, S. T., & DeVaney, S. A. (2010). Determinants of adequate emergency funds including the effects of seeking professional advice and industry affiliation. Family and Consumer Sciences Research Journal, 38(4), 405–419.Google Scholar
  2. Baum, S., & O’Malley, M. (2003). College on credit: How borrowers perceive their education debt. Journal of Student Financial Aid, 33(3), 7–19.Google Scholar
  3. Baum, S., & Schwartz, S. (2006). How much is too much? Defining benchmarks for manageable student debt. New York: College Board.Google Scholar
  4. Bayer, P. J., Bernheim, B. D., & Scholz, J. K. (2009). The effects of financial education in the workplace: Evidence from a survey of employers. Economic Inquiry, 47(4), 605–624. Scholar
  5. Bernheim, B. D., & Garrett, D. M. (2003). The effects of financial education in the workplace: Evidence from a survey of households. Journal of Public Economics, 87(7–8), 1487–1519. Scholar
  6. Bowen, C. F. (2002). Financial knowledge of teens and their parents. Journal of Financial Counseling and Planning, 12(2), 93–102.Google Scholar
  7. Brown, M., Grigsby, J., Klaauw, W., Wen, J., & Zafar, B. (2016). Financial education and the debt behavior of the young. The Review of Financial Studies, 29(9), 2490–2522. Scholar
  8. Bureau of Labor Statistics. CPI inflation calculator. Available at
  9. Burgess, S. L. (1982). Determinants of home ownership: A comparison of single female and single male headed households. Housing and Society, 9(1), 87–94.Google Scholar
  10. Campenhout, G. V. (2015). Revaluing the role of parents as financial socialization agents in youth financial literacy programs. Journal of Consumer Affairs, 49(1), 186–222. Scholar
  11. College Board. (2017). Trends in higher education series: Trends in college pricing 2017. Retrieved from
  12. Consumer Financial Protection Bureau. (2015). Annual report of the CFPB student loan ombudsman. Retrieved from
  13. Consumer Financial Protection Bureau. (2017). CFPB finds percentage of borrowers with $20 k in student debt doubled over last decade. Retrieved from
  14. Danes, S. M. (1994). Parental perceptions of children’s financial socialization. Journal of Financial Counseling and Planning, 5, 127–146.Google Scholar
  15. Fan, L. (2017). The influences of financial help-seeking and other information sources on consumer’s financial management behavior. (Unpublished doctoral dissertation). Athens, GA: The University of Georgia. Retrieved from
  16. Fan, L., & Chatterjee, S. (2017). Borrowing decisions of households: An examination of the information search process. Journal of Financial Counseling and Planning, 28(1), 95–106.Google Scholar
  17. Federal Reserve. (2016). Report on the economics well-being of U.S. households in 2015. Retrieved from
  18. Fry, R. (2012). A record one-in-five households now owe student loan debt. Religion, 5, 12.Google Scholar
  19. Garman, E. T., & Forgue, R. (2011). Personal finance. Boston: Cengage Learning.Google Scholar
  20. Greiner, K. (1996). How much student loan debt is too much? Journal of Student Financial Aid, 26(1), 7–16.Google Scholar
  21. Gundmunson, C. G., & Danes, S. M. (2011). Family financial socialization: Theory and critical review. Journal of Family Economic Issues, 32(4), 644–667. Scholar
  22. Hanna, S., & Lindamood, S. (1985). Ownership and ownership preference: A comparison of OLS and logit regressions. Housing and Society, 12(3), 133–146.Google Scholar
  23. Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, 89, 309–322.Google Scholar
  24. Jin, Y., Rejesus, R. M., & Little, B. B. (2005). Binary choice models for rare events data: A crop insurance fraud application. Applied Economics, 37(7), 841–848.Google Scholar
  25. Jorgensen, B. L., & Savla, J. (2010). Financial literacy of young adults: The importance of parental socialization. Interdisciplinary Journal of Applied Family Studies, 59(4), 65–478. Scholar
  26. Kahn, J. R., & Pearlin, L. I. (2006). Financial strain over the life course and health among older adults. Journal of Health and Social Behavior, 47(1), 17–31.Google Scholar
  27. Kim, J. (2007). Workplace financial education program: Does it have an impact on employee’s personal finances? Journal of Family and Consumer Sciences, 99(1), 43–47.Google Scholar
  28. Kim, J., & Chatterjee, S. (2013). Childhood financial socialization and young adults’ financial management. Journal of Financial Counseling and Planning, 24(1), 61–79.Google Scholar
  29. Kim, J., Kwon, J., & Anderson, E. A. (2005). Factors related to retirement confidence: Retirement preparation and workplace financial education. Journal of Financial Counseling and Planning, 16(2), 1–19.Google Scholar
  30. King, T., & Bannon, E. (2002). The burden of borrowing: A report on the rising rates of student loan debt. The State PIRGs’ higher education project. Retrieved from
  31. Kinsey, J., & Lane, S. (1983). Race, housing attributes, and satisfaction with housing. Housing and Society, 10(3), 98–116.Google Scholar
  32. Lee, J., & Mueller, J. A. (2014). Student loan debt literacy: A comparison of first-generation and continuing-generation college students. Journal of College Student Development, 55(7), 714–719. Scholar
  33. Lusardi, A. (2003). Saving and the effectiveness of financial education. Pension Research Council.
  34. Lusardi, A., & Tufano, P. (2009). Debt literacy, financial experiences, and overindebtedness. NBER Working Paper 14808. Retrieved from
  35. Lyons, A. C. (2004). A profile of financially at-risk college students. Journal of Consumer Affairs, 38(1), 56–80.Google Scholar
  36. Moschis, G. P., & Churchill, Jr. G. A. (1978). Consumer socialization: A theoretical and empirical analysis. Journal of Marketing Research, 15(4), 599–609.Google Scholar
  37. Mottola, G. R. (2013). In our best interest: Women, financial literacy, and credit card behavior. Numeracy, 6(2), 4.Google Scholar
  38. Pindyck, R. S., & Rubinfeld, D. L. (1976). Econometric models and economic forecasts. New York: McGraw-Hill.Google Scholar
  39. Pindyck, R. S., & Rubinfeld, D. L. (1988). Econometric models and economic forecasts. New York: McGraw-Hill Book Company.Google Scholar
  40. Prawitz, A. D., & Cohart, J. (2014). Workplace financial education facilitates improvement in personal financial behaviors. Journal of Financial Counseling and Planning, 25(1), 5–26.Google Scholar
  41. Ratcliffe, C., & McKernan, S. M. (2013). Forever in your debt: Who has student loan debt, and who’s worried. Washington, DC: Urban Institute.Google Scholar
  42. Ratcliffe, C., & McKernan, S. M. (2015). Who is most worried about student-loan debt? Communities & Banking, 26(1), 29–31.Google Scholar
  43. Robb, C. A., & Sharpe, D. L. (2009). Effect of personal financial knowledge on college students’ credit card behavior. Journal of Financial Counseling and Planning Volume, 20(1), 25–43.Google Scholar
  44. Robb, C. A., & Woodyard, A. (2011). Financial knowledge and best practice behavior. Journal of Financial Counseling and Planning, 22(1), 60–70.Google Scholar
  45. Schwartz, S., & Finnie, R. (2002). Student loans in Canada: An analysis of borrowing and repayment. Economics of Education Review, 21(5), 497–512.Google Scholar
  46. Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work and education. Journal of Youth and Adolescence, 39(12), 1457–1470. Scholar
  47. Shim, S., Serido, J., Bosch, L., & Tang, C. (2013). Financial identify-processing styles among young adults: A longitudinal study of socialization factors and consequences for financial capabilities. Journal of Consumer Affairs, 47(1), 128–152. Scholar
  48. Skinner, J. (1988). Risky income, life cycle consumption, and precautionary savings. Journal of Monetary Economics, 22(2), 237–255.Google Scholar
  49. Solheim, C. A., Zuiker, V. S., & Levchenko, P. (2011). Financial socialization family pathways: Reflections from college students’ narratives. Family Science Review, 16(2), 97–112.Google Scholar
  50. Tang, N., Baker, A., & Peter, P. C. (2015). Investigating the disconnect between financial knowledge and behavior: The role of parental influence and psychological characteristics in responsible financial behaviors among young adults. Journal of Consumer Affairs, 49(2), 376–406. Scholar
  51. Velez, E. D., & Woo, J. H. (2017). U.S. Department of education Stats in brief: The debt burden of Bachelor’s degree recipients. Retrieved from
  52. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data. Cambridge: The MIT press.Google Scholar
  53. Wrosch, C., Heckhausen, J., & Lachman, M. E. (2000). Primary and secondary control strategies for managing health and financial stress across adulthood. Psychology and Aging, 15(3), 387.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Personal Financial PlanningUniversity of MissouriColumbiaUSA
  2. 2.Department of Financial Planning, Housing and Consumer EconomicsUniversity of GeorgiaAthensUSA

Personalised recommendations