Do Young People See Debt As Empowering?

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.


Mary B.
Mary B6 years ago

Personal debt is enslaveing. Governmental debt is empowering. Why? Because the use of debt is very different. A powerful country must have at it's disposal vast amounts of money to deal with military budgets, natural desasters, infrastructure needs, social programs and any number of other things individuals don't have to contend with. With out a means of exchange to do so civilization would tank. The problem that we presently face, as I understand it, is not that too few have too much, but that so many have way too little. They can barely sustain themselves, let alone participate and contribute.A governments budget can be ballanced, but the deficit will continue as long as interest is charged on the money barrowed.And it's set up this way on purpose by the Global Banking system. Debt is not a good thing only if you must rely on a job for the means of exchange to pay it back. If the job goes away, you lose everything.But if the government has a strong and generous safety net, even if it takes barrowed money, you'll be okay.It's not the deficit that is unsustainable, it's the artificial creation of jobs that really add nothing of value, but take up lots of resources anyway, that is unsustainable. [like cutting down Asian Rainforests to make packaging for toys and extra soft toilet paper]

Judith Corrigan
Judith Corrigan6 years ago

Certain debt is understandable like a mortgage or student loans.These debts provide a better future for the people taking them out .

David L.
David L.6 years ago

Debt is the reason we have democracy instead of feudalism. Smart profiteers discovered long ago that you can squeeze one heck of a lot more productivity and money out of a serf if you allow him to think that he can live like a king instead of just tilling the king's land and forking over a measly one tenth of his annual productivity. People who smell the opportunity to own their own land and dwelling are far more willing to work overtime to be able to do so. The only other requirement is that they get into debt big time, like 30 years, during which they work long hours to earn the money they need to repay the bank more than twice the value of their estate. Moral: The most effective scam is the one that no one ever even suspects might actually be one.

Chloe M.
Chloe M6 years ago

I have $27k in loans for a BSN. I hope I can pay it off in about 5 years. If people can pay off their cars that cost that much, why not a college loan? Guess I'll need to keep my old clunker and pray that it lasts at least halfway.

Anne Ortiz Talvaz

Not to mention the fact that loans are marketed as a form of wise financial investment. Kids from affluent backgrounds have often been well advised by their parents on that score.
It's high time schools included financial literacy in the curriculum.

Marie W.
Marie W6 years ago

Debt empowers like big pharma drugs heal.

Arjun G.

Being constrained by debt at the very outset will determine the future course of one’s life. Education does not guarantee employment in today’s world with many societal ills and the depletion of resources. So paying off tuition fees is so much more difficult. It’s best to keep some form of balance so that you could control the potential risks involved in taking on too much debt. Youth must have choices in life or what good is an education!

John S.
Past Member 6 years ago

Is it a good thing - what kind of idiot are you?

Yvonne C.
Von D6 years ago

Debt is never empowering to anyone, just crushing unless mom and dad are paying for it I guess.

Bonnie S.
Bonnie Sweitzer6 years ago

Debt for college should be a reasonable approach, but not all college degrees bring equal opportunity.
Evaluate the future result.
My last secretary had a wonderful degree in classical art studies, but no jobs were available in her location. Nice for me because she was very smart, but not so good for her financially.