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Does Education Loan Debt Influence Household Financial Distress? An Assessment Using The 2007–2009 Survey Of Consumer Finances Panel

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  • Jesse Bricker
  • Jeffrey Thompson

Abstract

type="main" xml:id="coep12164-abs-0001"> Families with student loans in 2007 have higher levels of financial distress than families without such loans, and these families also transitioned to financial distress at higher rates during the early stages of the Great Recession. This correlation persists once we control for a host of other demographic, work-status, and household balance sheet measures. Families with an average level of student loans were 3.1 percentage points more likely to be 60 days late paying bills and 3 percentage points more likely to be denied credit. Families with other types of consumer debt were no more or less likely to be financially distressed. (JEL D14, H81, I22)

Suggested Citation

  • Jesse Bricker & Jeffrey Thompson, 2016. "Does Education Loan Debt Influence Household Financial Distress? An Assessment Using The 2007–2009 Survey Of Consumer Finances Panel," Contemporary Economic Policy, Western Economic Association International, vol. 34(4), pages 660-677, October.
    • Handle: RePEc:bla:coecpo:v:34:y:2016:i:4:p:660-677
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    File URL: http://hdl.handle.net/10.1111/coep.2016.34.issue-4
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    Citations

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    Cited by:

    1. Fedaseyeu Viktar & Strohush Vitaliy, 2018. "A Theory of Inefficient College Entry and Excessive Student Debt," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(1), pages 1-21, January.
    2. Cesar Leandro, Julio & Botelho, Delane, 2022. "Consumer over-indebtedness: A review and future research agenda," Journal of Business Research, Elsevier, vol. 145(C), pages 535-551.
    3. Burlinson, Andrew & Giulietti, Monica & Law, Cherry & Liu, Hui-Hsuan, 2021. "Fuel poverty and financial distress," Energy Economics, Elsevier, vol. 102(C).
    4. Jinhee Kim & Swarn Chatterjee, 2019. "Student Loans, Health, and Life Satisfaction of US Households: Evidence from a Panel Study," Journal of Family and Economic Issues, Springer, vol. 40(1), pages 36-50, March.
    5. Berrak Bahadir & Dora Gicheva, 2022. "Macroeconomic Implications of Student Debt: A State‐Level Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(8), pages 2273-2300, December.
    6. Despard, Mathieu R. & Perantie, Dana & Taylor, Samuel & Grinstein-Weiss, Michal & Friedline, Terri & Raghavan, Ramesh, 2016. "Student debt and hardship: Evidence from a large sample of low- and moderate-income households," Children and Youth Services Review, Elsevier, vol. 70(C), pages 8-18.
    7. Robin Henager & Sophia T. Anong & Joyce Serido & Soyeon Shim, 2021. "Does Financial Satisfaction Vary Depending on the Funding Strategy Used to Pay for College?," Journal of Family and Economic Issues, Springer, vol. 42(3), pages 429-448, September.
    8. Reid Dorsey-Palmateer, 2020. "Outsized impacts of residential energy and utility costs on household financial distress," Economics Bulletin, AccessEcon, vol. 40(4), pages 3061-3070.
    9. Jason Jabbari & Mathieu Despard & Olga Kondratjeva & Brinda Gupta & Michal Grinstein-Weiss, 2023. "Nothing to show for it: Financial Distress and Re-Enrollment Aspirations for those with non-degreed debt," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(1), pages 1-32, February.
    10. Thomas Korankye & Charlene M. Kalenkoski, 2021. "The Effect of Households’ Student Debt on Life Satisfaction," Journal of Family and Economic Issues, Springer, vol. 42(4), pages 757-772, December.

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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