A study conducted by Ohio State University in America has yielded some surprising results relating to the way young people view their debt problems.
The research was conducted by Rachel Dwyer, who is an assistant professor of sociology at the Columbus-based university, along with colleagues Randy Hodson and Laura McCloud. It looked at the attitudes of 3,079 young adults from all parts of the country towards acquiring debt whilst at university.
Rather than feeling stressed or anxious because of the money they owed through student loan and credit card debt, the young people included in the study actually felt quite empowered by it. In fact, the larger the debts these people had, the greater their self-esteem was and the more they felt they had control over their lives.
Lead author Rachel Dwyer explained this surprising outcome, saying that debt could be a positive for young people as it gives them the financial support they need to achieve their goals, such as getting a degree.
She also pointed out that for some types of debt, such as credit card debt, students may feel positive about it only because it allows them to buy the non-essential things they want or need, without the need to delay gratification by having to save up.
Dwyer said: “We thought educational debt might be seen as a positive because it is an investment in their future, while credit card debt could be viewed more negatively.
“Surprisingly, though, we found that both kinds of debt had positive effects for young people. It didn’t matter the type of debt, it increased their self-esteem and sense of mastery.
“Some young people may be using credit card debt to help finance their college education – for items like textbooks – which is why they may see it as a positive. But there is no way to know that from the data.
“Obviously, they are probably using credit cards for multiple purposes. Along with education spending, they could be using credit cards to pay for non-essential items.
“They may feel good about their debt only because it allows them to buy the things they want without having to delay gratification.”
However, this attitude to debt may also be a dangerous one, as Dwyer explains in the study:
“Young people seem to view debt mostly in just positive terms rather than as a potential burden.”
“By age 28, they may be realizing that they overestimated how much money they were going to earn in their jobs. When they took out the loans, they may have thought they would pay off their debts easily, and it is turning out that it is not as easy as they had hoped.”
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