I graduated from college exactly a week ago, and as I begin to get my bearings and figure out what exactly I’m going to do next, I think often about how grateful I am that, because of my university’s generous financial aid program, I graduated without debt. Obviously, I still need a job, but thankfully, I will not worry about paying off thousands of dollars – at least until I go to graduate school. But I’m also keenly aware that I am among a lucky few.
This is why, when I saw the results of a new study from Ohio State University this morning, I thought I had read the headline wrong. According to sociologists, young adults find debt — from credit cards or college loans — to be empowering. And the more debt that women and men aged 18 to 27 had, the more confident they felt. Debt allowed them to feel as though they had mastery over their lives and goals.
This seemed highly illogical to me. And even more surprisingly, the self-esteem boost that came with debt increased with the amount of money owed, at least until young adults got a little older. It was only until they entered a later age range — 28 to 34 years — that they began to “show signs of stress” about debt. But the researchers had a variety of hypotheses about their unpredictable findings, which began to make the results seem more sensible than they had.
First of all, the positive association with debt was not held among young adults who came from affluent families. So the people who found debt to be empowering were from lower or middle classes, who probably had to take out loans to afford an education and therefore associated their debt with an investment in their future. In fact, those in the lowest socioeconomic 25 percent got the biggest boost from owing money.
This is good and bad. As researchers pointed out, it’s very encouraging to see that young people see their education as an investment worth making. But the fact that stress increases with age also hints toward early idealism that may be somewhat misplaced.
“The groups that most need the debt – the middle and lower classes – get the most benefits to their self-concept,” explained lead researchers Rachel Dwyer, “but may also face the greatest difficulties in paying off what they owe.” She concluded, “Debt can be a positive resource for young adults, but it comes with some significant dangers.”
Perhaps one reason that I’m so grateful that I don’t have debt is that I know I do want to go to graduate school, which will require me to take out loans – so the fact that my education isn’t over means that I’m still willing to invest in it. Still, I don’t see debt as something positive, necessarily – rather, I find the idea of owing so much money to be frightening and overwhelming.
As Dwyer points out, “Debt may make young people feel better about themselves in the short-term, but that doesn’t mean it won’t have negative consequences in the long term,” she said. “They still have to pay the bills. The question is whether they will be able to.”
What do you think? Is it good to see that some young adults see debt as a sign of empowerment, or will this lead to negative consequences down the road?
Photo from AMagill's Flickr photostream.
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