IDEAS home Printed from https://ideas.repec.org/a/kap/jfamec/v40y2019i1d10.1007_s10834-018-9589-0.html
   My bibliography  Save this article

Financial Socialization, Financial Education, and Student Loan Debt

Author

Listed:
  • Lu Fan

    (University of Missouri)

  • Swarn Chatterjee

    (University of Georgia)

Abstract

This study examines the role of financial socialization, financial knowledge, and receiving financial education on student loan repayment behaviors and related financial stress, as reported by the participants. From an analysis of the 2015 National Financial Capability Study dataset, we find that individuals who received financial education in an academic or professional setting were less likely to be late on student loan payments or worry about their student loan debt. Additionally, those who received both financial education and learned about finances from their parents were even less likely to worry about their student loan debt. The broader implications of the main findings for financial counselors, therapists, and planners are also discussed.

Suggested Citation

  • Lu Fan & Swarn Chatterjee, 2019. "Financial Socialization, Financial Education, and Student Loan Debt," Journal of Family and Economic Issues, Springer, vol. 40(1), pages 74-85, March.
    • Handle: RePEc:kap:jfamec:v:40:y:2019:i:1:d:10.1007_s10834-018-9589-0
    DOI: 10.1007/s10834-018-9589-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10834-018-9589-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10834-018-9589-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Clinton Gudmunson & Sharon Danes, 2011. "Family Financial Socialization: Theory and Critical Review," Journal of Family and Economic Issues, Springer, vol. 32(4), pages 644-667, December.
    2. Lusardi, Annamaria & Tufano, Peter, 2015. "Debt literacy, financial experiences, and overindebtedness," Journal of Pension Economics and Finance, Cambridge University Press, vol. 14(4), pages 332-368, October.
    3. Geert Van Campenhout, 2015. "Revaluing the Role of Parents as Financial Socialization Agents in Youth Financial Literacy Programs," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(1), pages 186-222, March.
    4. Meta Brown & John Grigsby & Wilbert van der Klaauw & Jaya Wen & Basit Zafar, 2016. "Financial Education and the Debt Behavior of the Young," The Review of Financial Studies, Society for Financial Studies, vol. 29(9), pages 2490-2522.
    5. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    6. Patrick J. Bayer & B. Douglas Bernheim & John Karl Scholz, 2009. "The Effects Of Financial Education In The Workplace: Evidence From A Survey Of Employers," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 605-624, October.
    7. Schwartz, S. & Finnie, R., 2002. "Student loans in Canada: an analysis of borrowing and repayment," Economics of Education Review, Elsevier, vol. 21(5), pages 497-512, October.
    8. Ning Tang & Andrew Baker & Paula C. Peter, 2015. "Investigating the Disconnect between Financial Knowledge and Behavior: The Role of Parental Influence and Psychological Characteristics in Responsible Financial Behaviors among Young Adults," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(2), pages 376-406, July.
    9. Yufei Jin & Roderick Rejesus & Bertis Little, 2005. "Binary choice models for rare events data: a crop insurance fraud application," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 841-848.
    10. Skinner, Jonathan, 1988. "Risky income, life cycle consumption, and precautionary savings," Journal of Monetary Economics, Elsevier, vol. 22(2), pages 237-255, September.
    11. Bernheim, B. Douglas & Garrett, Daniel M., 2003. "The effects of financial education in the workplace: evidence from a survey of households," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1487-1519, August.
    12. Soyeon Shim & Joyce Serido & Leslie Bosch & Chuanyi Tang, 2013. "Financial Identity-Processing Styles Among Young Adults: A Longitudinal Study of Socialization Factors and Consequences for Financial Capabilities," Journal of Consumer Affairs, Wiley Blackwell, vol. 47(1), pages 128-152, April.
    13. Sondra G. Beverly & Marianne A. Hilgert & Jeanne M. Hogarth, 2003. "Household financial management: the connection between knowledge and behavior," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 309-322.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicoleta Andreea Neacșu & Carmen Elena Anton & Camelia Mirela Baba & Anca Popescu, 2023. "Financial and Banking Education of Consumers in the Context of Sustainable Development Society," Sustainability, MDPI, vol. 15(13), pages 1-22, June.
    2. Terri Friedline & Zibei Chen & So’Phelia Morrow, 2021. "Families’ Financial Stress & Well-Being: The Importance of the Economy and Economic Environments," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 34-51, July.
    3. Suzanne Bartholomae & Jonathan J. Fox, 2021. "A Decade Review of Research on College Student Financial Behavior and Well-Being," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 154-177, July.
    4. Julie Miller & Samantha Brady & Alexa Balmuth & Lisa D’Ambrosio & Joseph Coughlin, 2021. "Student Loans at the Dinner Table: Family Communication Patterns About Student Loans Before Accrual and During Repayment," Journal of Family and Economic Issues, Springer, vol. 42(2), pages 251-271, June.
    5. Adam Ndou, 2023. "Parental Financial Socialisation and Child’s Gender," International Journal of Economics and Financial Issues, Econjournals, vol. 13(5), pages 59-66, September.
    6. Jing Jian Xiao & Nilton Porto & Irene McIvor Mason, 2020. "Financial capability of student loan holders who are college students, graduates, or dropouts," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(4), pages 1383-1401, December.
    7. Khalid Abdul Ghafoor & Muhammad Akhtar, 2024. "Parents’ financial socialization or socioeconomic characteristics: which has more influence on Gen-Z’s financial wellbeing?," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    8. Kenneth White & Kimberly Watkins & Megan McCoy & Bertranna Muruthi & Jamie Lynn Byram, 2021. "How Financial Socialization Messages Relate to Financial Management, Optimism and Stress: Variations by Race," Journal of Family and Economic Issues, Springer, vol. 42(2), pages 237-250, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baulkaran, Vishaal, 2022. "Personal bankruptcy and consumer credit delinquency: The case of personal finance education," International Review of Financial Analysis, Elsevier, vol. 81(C).
    2. Mustabsar Awais & M. Fahad Laber & Nilofer Rasheed & Aisha Khursheed, 2016. "Impact of Financial Literacy and Investment Experience on Risk Tolerance and Investment Decisions: Empirical Evidence from Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 73-79.
    3. Minchao Jin & Zibei Chen, 2020. "Comparing Financial Socialization and Formal Financial Education: Building Financial Capability," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 641-656, June.
    4. Annamaria Lusardi & Olivia S. Mitchell, 2017. "How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-31, September.
    5. Hanson, Thomas A. & Olson, Peter M., 2018. "Financial literacy and family communication patterns," Journal of Behavioral and Experimental Finance, Elsevier, vol. 19(C), pages 64-71.
    6. Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Financial literacy and retirement planning: New evidence from the Rand American Life Panel," CFS Working Paper Series 2007/33, Center for Financial Studies (CFS).
    7. Sigrid Luhr, 2018. "How Social Class Shapes Adolescent Financial Socialization: Understanding Differences in the Transition to Adulthood," Journal of Family and Economic Issues, Springer, vol. 39(3), pages 457-473, September.
    8. Annamaria Lusardi, 2008. "Financial Literacy: An Essential Tool for Informed Consumer Choice?," NFI Working Papers 2008-WP-13, Indiana State University, Scott College of Business, Networks Financial Institute.
    9. Bose, Udichibarna & MacDonald, Ronald & Tsoukas, Serafeim, 2014. "The role of education in equity portfolios during the recent financial crisis," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-26, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Jae Min Lee & Narang Park & Wookjae Heo, 2019. "Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use," IJFS, MDPI, vol. 7(3), pages 1-21, September.
    11. NDOU, Adam, 2023. "Parental Financial Socialisation And Socioeconomic Status," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 27(1), pages 39-58, March.
    12. Sholevar, Maryam & Harris, Laurence, 2019. "Mind the gap: A discussion paper on Financial Literacy, Financial behaviour and Financial Education : Is there any Gender Gap?," OSF Preprints b7zd6, Center for Open Science.
    13. Geert Van Campenhout, 2015. "Revaluing the Role of Parents as Financial Socialization Agents in Youth Financial Literacy Programs," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(1), pages 186-222, March.
    14. Tim Kaiser & Lukas Menkhoff, 2017. "Does Financial Education Impact Financial Literacy and Financial Behavior, and If So, When?," The World Bank Economic Review, World Bank, vol. 31(3), pages 611-630.
    15. van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob, 2011. "Financial literacy and stock market participation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 449-472, August.
    16. Oscar A. Stolper & Andreas Walter, 2017. "Financial literacy, financial advice, and financial behavior," Journal of Business Economics, Springer, vol. 87(5), pages 581-643, July.
    17. Patrick J. Bayer & B. Douglas Bernheim & John Karl Scholz, 2009. "The Effects Of Financial Education In The Workplace: Evidence From A Survey Of Employers," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 605-624, October.
    18. Collins, J. Michael, 2013. "The impacts of mandatory financial education: Evidence from a randomized field study," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 146-158.
    19. Bose, Udichibarna & MacDonald, Ronald & Tsoukas, Serafeim, 2015. "Education and the local equity bias around the world," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-76, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Lusardi, Annamaria & Kaiser, Tim, 2024. "Financial literacy and financial education: An overview," CEPR Discussion Papers 19185, C.E.P.R. Discussion Papers.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jfamec:v:40:y:2019:i:1:d:10.1007_s10834-018-9589-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.