Advertisement

Journal of Family and Economic Issues

, Volume 40, Issue 1, pp 36–50 | Cite as

Student Loans, Health, and Life Satisfaction of US Households: Evidence from a Panel Study

  • Jinhee Kim
  • Swarn ChatterjeeEmail author
Original Paper

Abstract

As student loan debt among US households continues to rise, the resulting debt burden may have consequences for multiple aspects of life, including household health and well-being. Using panel data from 2011, 2013, and 2015 waves of the Panel Study of Income Dynamics (PSID), this study investigated whether student loans are associated with self-reported health, psychological problems, and perceived life satisfaction. The results demonstrate that student loan debt was negatively associated with the life satisfaction and psychological well-being of respondents after controlling for other types of debt, such as medical and credit card debt, assets and income, and a number of other sociodemographic factors. Student loan debt from previous periods was also negatively associated with the health status of Hispanic respondents. The policy implications discussed in this study are relevant in the light of increasing higher education costs and debt burdens in America. The key findings from this study have policy implications for the long-term effects of student loans on life satisfaction, health, and well-being over time.

Keywords

Student loans Life satisfaction Health Psychological problems Income Wealth Financial planning 

Notes

Compliance with Ethical Standards

Conflict of interest

Jinhee Kim and Swarn Chatterjee declare that they have no conflict of interest.

References

  1. Adams, D. R., Meyers, S. A., & Beidas, R. S. (2016). The relationship between financial strain, perceived stress, psychological symptoms, and academic and social integration in undergraduate students. Journal of American College Health, 64(5), 362–370.  https://doi.org/10.1080/07448481.2016.1154559.Google Scholar
  2. Adams, S. J. (2002). Educational attainment and health: Evidence from a sample of older adults. Education Economics, 10(1), 97–109.Google Scholar
  3. Adams, T., & Moore, M. (2007). High-risk health and credit behavior among 18- to 25-year-old college students. Journal of American College Health, 56(2), 101–108.Google Scholar
  4. Anson, O., Paran, E., Neumann, L., & Chernichovsky, D. (1993). Gender differences in health perceptions and their predictors. Social Science & Medicine, 36(4), 419–427.Google Scholar
  5. Archuleta, K. L., Dale, A., & Spann, S. M. (2013). College students and financial distress: Exploring debt, financial satisfaction, and financial anxiety. Journal of Financial Counseling and Planning, 24(2), 50–62.Google Scholar
  6. Bricker, J., & Thompson, J. (2016). Does educational loan debt influence household financial distress? An assessment using the 2007–2009 Survey of Consumer Finances Panel. Contemporary Economic Policy, 34(4), 660–677.  https://doi.org/10.1111/coep.12164.Google Scholar
  7. Bridges, S., & Disney, R. (2010). Debt and depression. Journal of Health Economics, 29(3), 388–403.  https://doi.org/10.1016/j.jhealeco.2010.02.003.Google Scholar
  8. Britt, S. L., Ammerman, D. A., Barrett, S. F., & Jones, S. (2017). Student loans, financial stress, and college student retention. Journal of Student Financial Aid, 47(1), 25–37.Google Scholar
  9. Callender, C., & Jackson, J. (2005). Does the fear of debt deter students from higher education? Journal of Social Policy, 34, 509–540.Google Scholar
  10. Callender, C., & Mason, G. (2017). Does student loan debt deter higher education participation? New Evidence from England. Annals of The American Academy of Political & Social Science, 671(1), 20–48.  https://doi.org/10.1177/0002716217696041.Google Scholar
  11. Cannuscio, C. C., Alley, D. E., Pagán, J. A., Soldo, B., Krasny, S., Shardell, M., … Lipman, T. H. (2012). Housing strain, mortgage foreclosure, and health. Nursing Outlook, 60(3), 134.e1–142.e1.  https://doi.org/10.1016/j.outlook.2011.08.004.
  12. Chen, R., & Desjardins, S. L. (2010). Investigating the impact of financial aid on student dropout risks: Racial and ethnic differences. Journal of Higher Education, 81(2), 179–208.Google Scholar
  13. Chipperfield, J. G., & Havens, B. (2001). Gender differences in the relationship between marital status transitions and life satisfaction in later life. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences, 56(3), P176–P186.Google Scholar
  14. Chiteji, N. S. (2007). To have and to hold: An analysis of young adult debt. In S. Danziger & C. E. Rouse (Eds.), The price of independence: The economics of early adulthood. New York: Russell Sage Foundation.Google Scholar
  15. Choy, S. P., & Carroll, C. D. (2000). Debt burden four years after college. Washington, DC: National Center for Education Statistics.Google Scholar
  16. Cilluffo, A. (2017). Five facts about student loans. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank/2017/08/24/5-facts-about-student-loans/.
  17. College Board (2017). Trends in student financial aid. Retrieved from https://trends.collegeboard.org/sites/default/files/2017-trends-student-aid_0.pdf.
  18. Cooke, R., Barkham, M., Audin, K., Bradley, M., & Davy, J. (2004). Student debt and its relation to student mental health. Journal of Further and Higher Education, 28(1), 53–66.Google Scholar
  19. Cornelius, L. M., & Frank, S. A. (2015). Student loan debt levels and their implications for borrowers, society, and the economy. Educational Considerations, 42(2), 35–38.Google Scholar
  20. Dannefer, D. (1987). Aging as intracohort differentiation: Accentuation, the Matthew effect, and the life course. In Sociological Forum, 2(2), 211–236.Google Scholar
  21. Davidson, P. (2017). Are student loans as big of a problem as people think? USA Today. Retrieved from https://www.usatoday.com/story/money/2017/07/07/student-loans-big-problem-people-think/101842736/.
  22. Despard, M., Perantie, D., Taylor, S., Grinstein-Weiss, M., Friedline, T., & Raghavan, R. (2016). Student debt and hardship: Evidence from a large sample of low- and moderate-income households. Children & Youth Services Review, 70(C), 8–18.  https://doi.org/10.1016/j.childyouth.2016.09.001.Google Scholar
  23. Dickerson, A. M. (2016). Millennials, affordable housing, and the future of homeownership. Journal of Affordable Housing & Community Development Law, 24(3), 435–465.Google Scholar
  24. Drentea, P., & Lavrakas, P. J. (2000). Over the limit: The association among health, race and debt. Social Science & Medicine, 50(4), 517–529.Google Scholar
  25. Dwyer, R. E., McCloud, L., & Hodson, R. (2012). Debt and graduation from American Universities. Social Forces, 90(4), 1133–1155.  https://doi.org/10.1093/sf/sos072.Google Scholar
  26. Elliott, W., & Friedline, T. (2013). “You pay your share, we’ll pay our share”: The college cost burden and the role of race, income, and college assets [special issue]. Economics of Education Review, 33, 134–153.  https://doi.org/10.1016/j.econedurev.2012.10.001.Google Scholar
  27. Elliott, W., III, & Nam, I. (2013). Is student debt jeopardizing the short-term financial health of US. households? Federal Reserve Bank of St. Louis Review, 95(5), 405–424.Google Scholar
  28. Federal Reserve Bank of New York. (2018). Quarterly report on household debt and credit. Retrieved from https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2018Q1.pdf.
  29. Ferraro, K. F., Thorpe Jr, R. J., McCabe, G. P., Kelley-Moore, J. A., & Jiang, Z. (2006). The color of hospitalization over the adult life course: Cumulative disadvantage in black and white? The Journals of Gerontology Series B: Psychological Sciences and Social Sciences, 61(6), S299–S306.Google Scholar
  30. Field, E. (2009). Educational debt burden and career choice: Evidence from a financial aid experiment at NYU Law School. American Economic Journal: Applied Economics, 1(1), 1–21.Google Scholar
  31. Fitch, C., Hamilton, S., Bassett, P., & Davey, R. (2011). The relationship between personal debt and mental health: A systematic review. Mental Health Review Journal, 16(4), 153–166.Google Scholar
  32. Frijters, P., Haisken-DeNew, J. P., & Shields, M. A. (2004). Money does matter! Evidence from increasing real income and life satisfaction in East Germany following reunification. American Economic Review, 94(3), 730–740.Google Scholar
  33. Fry, R. (2014). Young adults, student debt and economic well-being. Washington, DC: Pew Research Center’s Social and Demographic Trends project.Google Scholar
  34. Gicheva, D. (2016). Student loans or marriage? A look at the highly educated. Economics of Education Review, 53, 207–216.  https://doi.org/10.1016/j.econedurev.2016.04.006.Google Scholar
  35. Grinstein-Weiss, M., Perantie, D., Taylor, S., Guo, S., & Raghavan, R. (2016). Racial disparities in education debt burden among low- and moderate-income households. Children & Youth Services Review, 65, 166–174.  https://doi.org/10.1016/j.childyouth.2016.04.010.Google Scholar
  36. Hagquist, C. E. (1998). Economic stress and perceived health among adolescents in Sweden. Journal of Adolescent Health, 22(3), 250–257.Google Scholar
  37. Hajat, A., Kaufman, J. S., Rose, K. M., Siddiqi, A., & Thomas, J. C. (2010). Do the wealthy have a health advantage? Cardiovascular disease risk factors and wealth. Social Science & Medicine, 71(11), 1935–1942.Google Scholar
  38. Hiltonsmith, R. (2013). At what cost? How student debt reduces lifetime wealth (report). New York: Demos. Retrieved from http://www.demos.org/sites/default/files/publications/AtWhatCostFinal_Demos.pdf.
  39. Hoeve, M., Stams, G. M., van der Zouwen, M., Vergeer, M., Jurrius, K., & Asscher, J. J. (2014). A systematic review of financial debt in adolescents and young adults: Prevalence, correlates and associations with crime. PLoS ONE, 9(8), 1–16.  https://doi.org/10.1371/journal.pone.0104909.Google Scholar
  40. Hoeymans, N., Feskens, E. J., Van den Bos, G. A., & Kromhout, D. (1997). Age, time, and cohort effects on functional status and self-rated health in elderly men. American Journal of Public Health, 87(10), 1620–1625.Google Scholar
  41. Hojman, D. A., Miranda, Á, & Ruiz-Tagle, J. (2016). Debt trajectories and mental health. Social Science & Medicine, 16, 754–762.  https://doi.org/10.1016/j.socscimed.2016.08.027.Google Scholar
  42. Houle, J. N., & Berger, L. (2015). Is student loan debt discouraging homeownership among young adults? Social Service Review, 89(4), 589–621.Google Scholar
  43. Jackson, B. A., & Reynolds, J. R. (2013). The price of opportunity: Race, student loan debt, and college achievement. Sociological Inquiry, 83(3), 335–368.  https://doi.org/10.1111/soin.12012.Google Scholar
  44. Jessop, D. C., Herberts, C., & Solomon, L. (2005). The impact of financial circumstances on student health. British Journal of Health Psychology, 10, 421–439.Google Scholar
  45. 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.  https://doi.org/10.1177/002214650604700102.Google Scholar
  46. Kaplan, R. M., Fang, Z., & Kirby, J. (2017). Educational attainment and health outcomes: Data from the Medical Expenditures Panel Survey. Health Psychology, 36(6), 598.Google Scholar
  47. Kim, J., Sorhaindo, B., & Garman, E. T. (2006). Relationship between financial stress and workplace absenteeism of credit counseling clients. Journal of Family and Economic Issues, 27(3), 458–478.Google Scholar
  48. Kissel, M. (2004, June 30). Rising health-care costs hit home. The Wall Street Journal, p. D2.Google Scholar
  49. Krause, N., & Hayward, R. D. (2015). Assessing whether trust in God offsets the effects of financial strain on health and well-being. International Journal for the Psychology of Religion, 25(4), 307–322.  https://doi.org/10.1080/10508619.2014.952588.Google Scholar
  50. Lange, C., & Byrd, M. (1998). The relationship between perceptions of financial distress and feelings of psychological well-being in New Zealand university students. International Journal of Adolescence and Youth, 7(3), 193–209.  https://doi.org/10.1080/02673843.1998.9747824.Google Scholar
  51. Lazarus, R. S., & Folkman, S. (1984). Coping and adaptation. In W. D. Gentry (Ed.), The handbook of behavioral medicine (pp. 282–325). New York: Guilford.Google Scholar
  52. Lee, J., Kim, E., & Wachholtz, A. (2016). The effect of perceived stress on life satisfaction: The mediating effect of self-efficacy. Chongsonyonhak Yongu, 23(10), 29–47.Google Scholar
  53. Leganger, A., & Kraft, P. (2003). Control constructs: Do they mediate the relation between educational attainment and health behaviour? Journal of Health Psychology, 8(3), 361–372.Google Scholar
  54. Looney, A., & Yannelis, C. (2015). A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising loan defaults. Brookings Paper on Economic Activity. Retrieved from https://www.brookings.edu/wp-content/uploads/2016/07/ConferenceDraft_LooneyYannelis_StudentLoanDefaults.pdf.
  55. Lyons, A. C., & Yilmazer, T. (2005). Health and financial strain: Evidence from the survey of consumer finances. Southern Economic Journal, 71(4), 873–890.Google Scholar
  56. May, J. H., & Cunningham, P. J. (2004). Tough trade-offs: Medical bills, family finances and access to care. Center for Health System Change Issue Brief, 85, 1–4.Google Scholar
  57. McKinney, L., & Burridge, A. B. (2015). Helping or hindering? The effects of loans on community college student persistence. Research in Higher Education, 56(4), 299–324.  https://doi.org/10.1007/s11162-014-9349-4.Google Scholar
  58. Meeks, S., & Murrell, S. A. (2001). Contribution of education to health and life satisfaction in older adults mediated by negative affect. Journal of Aging and Health, 13(1), 92–119.Google Scholar
  59. Mezza, A., Ringo, D., Sherlund, S., & Sommer, K. (2016). On the effect of student loans on access to homeownership. Working Papers—US. Federal Reserve Board’s Finance & Economic Discussion Series, 1–35.  https://doi.org/10.17016/FEDS.2016.010.
  60. Miech, R. A., & Shanahan, M. J. (2000). Socioeconomic status and depression over the life course. Journal of Health and Social Behavior, 41(2), 162–176.Google Scholar
  61. Minicozzi, A. (2005). The short term effect of educational debt on job decisions. Economics of Education Review, 24(4), 417–430.Google Scholar
  62. Mirowsky, J., & Ross, C. E. (1986). Social patterns of distress. Annual Review of Sociology, 12(1), 23–45.Google Scholar
  63. Nelson, M. C., Lust, K., Story, M., & Ehlinger, E. (2008). Credit card debt, stress and key health risk behaviors among college students. American Journal of Health Promotion, 22(6), 400–407.Google Scholar
  64. Pearlin, L. I., Schieman, S., Fazio, E. M., & Meersman, S. C. (2005). Stress, health, and the life course: Some conceptual perspectives. Journal of Health and Social Behavior, 46(2), 205–219.Google Scholar
  65. Price, D. V. (2004). Educational debt burden among student borrowers: An analysis of the baccalaureate & beyond panel, 1997 Follow-Up. Research in Higher Education, 45(7), 701–737.Google Scholar
  66. Richardson, T., Elliott, P., & Roberts, R. (2013). The relationship between personal unsecured debt and mental and physical health: A systematic review and meta-analysis. Clinical Psychology Review, 33(8), 1148–1162.  https://doi.org/10.1016/j.cpr.2013.08.009.Google Scholar
  67. Roberts, R. P., Golding, J. P., Towell, T. P., & Weinreb, I. M. (1999). The effects of economic circumstances on British students’ mental and physical health. Journal of American College Health, 48(3), 103–109.  https://doi.org/10.1080/07448489909595681.Google Scholar
  68. Rose, C. C. (2016). Overcoming the obstacles student debt presents to the ability to buy a home. Journal of Financial Service Professionals, 70(5), 72–80.Google Scholar
  69. Rothstein, J., & Rouse, C. E. (2011). Constrained after college: Student loans and early-career occupational choices. Journal of Public Economics, 95(1–2), 149–163.Google Scholar
  70. Ryff, C. D. (1995). Psychological well-being in adult life. Current Directions in Psychological Science, 4(4), 99–104.Google Scholar
  71. Schneiderman, N., Ironson, G., & Siegel, S. D. (2005). Stress and health: Psychological, behavioral, and biological determinants. Annual Review of Clinical Psychology, 1, 607–628.  https://doi.org/10.1146/annurev.clinpsy.1.102803.144141.Google Scholar
  72. Selye, H. (1976). Stress in health and disease. Reading: Butterworth’s.Google Scholar
  73. Siahpush, M., & Carlin, J. B. (2006). Financial stress, smoking cessation and relapse: Results from a prospective study of an Australian national sample. Addiction, 110, 121–127.Google Scholar
  74. Siahpush, M., Huang, T. T., Sikora, A., Tibbits, M., Shaikh, R. A., & Singh, G. K. (2014). Prolonged financial stress predicts subsequent obesity: Results from a prospective study of an Australian national sample. Obesity, 22(2), 616–621.  https://doi.org/10.1002/oby.20572.Google Scholar
  75. Smith, J. P. (1999). Healthy bodies and thick wallets: The dual relation between health and economic status. The Journal of Economic Perspectives, 13(2), 145–166.Google Scholar
  76. Spreitzer, E., & Snyder, E. E. (1974). Correlates of life satisfaction among the aged. Journal of Gerontology, 29(4), 454–458.Google Scholar
  77. Stack, S., & Eshleman, J. R. (1998). Marital status and happiness: A 17-nation study. Journal of Marriage and the Family, 60(2), 527–536.Google Scholar
  78. Stevenson, J. S. (2010). The relationship between student credit card debt, volunteerism, academic achievement, and health. Dissertation Abstracts International, 71, 3368.Google Scholar
  79. Sweet, E., Nandi, A., Adam, E. K., & McDade, T. W. (2013). The high price of debt: Household financial debt and its impact on mental and physical health. Social Science & Medicine, 91, 94–100.  https://doi.org/10.1016/j.socscimed.2013.05.009.Google Scholar
  80. The Institute for College Access and Success (2016). Average student debt at graduation up 4% to $30,100 for class of 2015. Retrieved from https://ticas.org/sites/default/files/pub_files/student_debt_and_the_class_of_2015_nr.pdf.
  81. United States Department of Education (2017). U.S. Department of Education Releases National Student Loan FY 2014 Cohort Default Rate. Retrieved from https://www.ed.gov/news/press-releases/us-department-education-releases-national-student-loan-fy-2014-cohort-default-rate.
  82. Verbrugge, L. M. (1979). Marital status and health. Journal of Marriage and the Family, 41(2), 267–285.Google Scholar
  83. Walsemann, K. M., Gee, G. C., & Gentile, D. (2015). Sick of our loans: Student borrowing and the mental health of young adults in the United States. Social Science & Medicine, 124, 85–93.  https://doi.org/10.1016/j.socscimed.2014.11.027.Google Scholar
  84. Whitaker, S. (2015). Are millennials with student loans upwardly mobile? Economic Commentary, 12, 1.Google Scholar
  85. Wilson-Strydom, M., & Walker, M. (2015). A capabilities-friendly conceptualisation of flourishing in and through education. Journal of Moral Education, 44(3), 310–324.Google Scholar
  86. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data. Cambridge: MIT.Google Scholar
  87. Xiao, J. J., Tang, C., & Shim, S. (2009). Acting for happiness: Financial behavior and life satisfaction of college students. Social Indicators Research, 92(1), 53–68.  https://doi.org/10.1007/s11205-008-9288-6.Google Scholar
  88. Zhan, M., Xiang, X., & Elliott, W. I. (2016). Education loans and wealth building among young adults. Children and Youth Services Review, 66, 67–75.  https://doi.org/10.1016/j.childyouth.2016.04.024.Google Scholar
  89. Zhang, L. (2013). Effects of college educational debt on graduate school attendance and early career and lifestyle choices. Education Economics, 21(2), 154–175.Google Scholar

Copyright information

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

Authors and Affiliations

  1. 1.Department of Family ScienceUniversity of MarylandCollege ParkUSA
  2. 2.Department of Financial Planning, Housing and Consumer EconomicsUniversity of GeorgiaAthensUSA

Personalised recommendations