In this study, we examined (1) the effect of changes in outstanding student debt on trajectories of subjective financial well-being (SFWB) over time and (2) how these trajectories vary according to family socioeconomic and emerging adult financial factors. We used three waves of longitudinal data from the Arizona Pathways to Life Success for University Students (APLUS) study and used growth curve models to analyze the data. Net of family socioeconomic and emerging adult financial factors, student debt was significantly and negatively associated with SFWB across the emerging adult period. Trajectories of SFWB varied slightly in relation to changes in student debt. Between-person differences in debt mattered more for trajectories of SFWB relative to within-person changes in debt over time. Family socioeconomic factors had a strong influence on SFWB trajectories. Findings illustrate how student debt may suppress postsecondary education’s impact as an inequality reducing mechanism. They also suggest the need for both individual- and policy-level intervention.
AllisonP. D. (2009). Fixed effects regression models. Los Angeles, CA: Sage.
2.
ArchuletaK. L.DaleA.SpannS. M. (2013). College students and financial distress: Exploring debt, financial satisfaction, and financial anxiety. Journal of Financial Counseling and Planning, 24, 50–62.
3.
BaumS.MaJ.PenderM.WelchM. (2016). Trends in student aid. New York, NY: College Board.
4.
BaumS.SchwartzS. (2006). How much debt is too much? Defining benchmarks for manageable student debt. New York, NY: College Board.
5.
BellD. N. F.BlanchflowerD. G.BlanchflowerD. G. (2010). Young people and recession: A lost generation?Rome, Italy: Einaudi Institute for Economics and Finance.
6.
BrownM.HaughwoutA.LeeD.ScallyJ.Van Der KlaauwW. (2015). Looking at student loan defaults through a larger window. New York, NY: Federal Reserve Bank of New York.
7.
BrüggenE. C.HogreveJ.HolmlundM.KabadayiS.LöfgrenM. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228–237. doi:10.1016/j.jbusres.2017.03.013
CarneiroP.HeckmanJ. J.VytlacilE. J. (2010). Estimating marginal returns to education(Working Paper No. 16474). Cambridge, MA: National Bureau of Economic Research. doi: 10.3386/w16474
DeinerE.LucasR. E.OishiS. (2002). Subjective well-being: The science of happiness and life satisfaction. In SnyderC. R.LopezS. J. (Eds.), Handbook of positive psychology (2nd ed., pp. 63–73). New York, NY: Oxford University of Press. Retrieved fromhttps://doi.org/10.1146/annurev.psych.54.101601.145056
12.
DespardM. R.PerantieD.TaylorS.Grinstein-WeissM.FriedlineT.RaghavanR. (2016). Student debt and hardship: Evidence from a large sample of low- and moderate-income households. Children and Youth Services Review, 70, 8–18. Retrieved fromhttps://doi.org/10.1016/j.childyouth.2016.09.001
13.
DrenteaP. (2000). Age, debt and anxiety. Journal of Health and Social Behavior, 41, 437–450.
14.
DwyerR. E.HodsonR.McCloudL. (2013). Gender, debt, and dropping out of college. Gender & Society, 27, 30–55.
ElliottW.NamI. (2013). Is student debt jeopardizing the short-term financial health of U.S. households?Federal Reserve Bank St. Louis Review, 95, 405–424.
FriedlineT.MasaR. D.ChowaG. A. N. (2015). Transforming wealth: Using the inverse hyperbolic sine (IHS) and splines to predict youth’s math achievement. Social Science Research, 49, 264–287. Retrieved fromdoi:10.1016/j.ssresearch.2014.08.018
GichevaD.ThompsonJ. (2015). The effects of student loans on long-term household financial stability. In HershbeingB.HollenbeckK. (Eds.), Student loans and the dynamics of debt (pp. 287–316). Kalamazoo, MI: W.E. Upjohn Institute.
21.
HeadeyB.MuffelsR. (2017). A theory of life satisfaction dynamics: Stability, change and volatility in 25-year life trajectories in Germany. Social Indicators Research. doi:10.1007/s11205-017-1785-z
22.
HouleJ. N. (2014). Disparities in debt: Parents’ socioeconomic resources and young adult student loan debt. Sociology of Education, 87, 53–69. doi:10.1177/0038040713512213
23.
HouleJ. N.AddoF. R. (2018). Racial disparities in student debt and the reproduction of the fragile black middle class. Sociology of Race and Ethnicity. doi:10.1177/2332649218790989
24.
HuelsmanM. (2015). The debt divide: The racial and class bias behind the “new normal” of student borrowing. New York, NY: Demos.
LayardR. (2011). Happiness: Lessons from a new science. London, England: Penguin.
27.
LucasR.DonnellanM. (2007). How stable is happiness? Using the STARTS model to estimate the stability of life satisfaction. Journal of Research in Personality, 41, 1091–1098. doi:10.1016/j.jrp.2006.11.005
28.
ModiglianiF. (1966). The life cycle hypothesis of saving, the demand for wealth and the supply of capital. Social Research, 33, 160–217.
29.
NetemeyerR. G.WarmathD.FernandesD.LynchJ. G. (2018). How am I doing? Perceived financial well-being, its potential antecedents, and its relation to overall well-being. Journal of Consumer Research, 45, 68–89. doi:10.1093/jcr/ucx109
30.
NissenS.HaywardB.McManusR. (2019). Student debt and wellbeing: A research agenda. Kōtuitui: New Zealand Journal of Social Sciences Online, 0, 1–12. doi:10.1080/1177083X.2019.1614635
PlagnolA. C. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology, 32, 45–64.
33.
RatcliffeC.McKernanS.-M. (2013). Forever in your debt: Who has student loan debt, and who’s worried?Washington, DC: Urban Institute.
34.
RobbC. A. (2017). College student financial stress: Are the kids alright?Journal of Family and Economic Issues, 38, 514–527. doi:10.1007/s10834-017-9527-6
35.
RothsteinJ.RouseC. E. (2011). Constrained after college: Student loans and early-career occupational choices. Journal of Public Economics, 95, 149–163. doi:10.1016/j.jpubeco.2010.09.015
36.
SchoeniR. F.RossK. E. (2005). Material assistance from families during the transition to adulthood. Chicago, IL: University of Chicago Press. Retrieved from http://dx.doi.org/10.7208/chicago/9780226748924.003.0012
37.
SeridoJ.ShimS.TangC. (2013). A developmental model of financial capability: A framework for promoting a successful transition to adulthood. International Journal of Behavioral Development, 37, 287–297.
38.
SeridoJ.CurranM. J.WilmarthM.AhnS. Y.ShimS.BallardJ. (2015). The unique role of parents and romantic partners on college students’ financial attitudes and behaviors. Family Relations, 64, 696–710. doi:10.1111/fare.12164
39.
ShimS.XiaoJ. J.BarberB. L.LyonsA. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30, 708–723. Retrieved fromhttps://doi.org/10.1016/j.appdev.2009.02.003
40.
SingerJ. D.WillettJ. B. (2003). Applied longitudinal data analysis: Modeling change and event occurrence. Oxford, England: Oxford University Press.
41.
SolisO.FergusonR. (2017). The relationship of student loan and credit card debt on financial satisfaction of college students. College Student Journal, 51, 329–336.
42.
SorgenteA.LanzM. (2017). Emerging adults’ financial well-being: A scoping review. Adolescent Research Review, 2, 255–292. doi:10.1007/s40894-016-0052-x
43.
StoneC.Van HornC.ZukinC. (2012). Chasing the American dream: Recent college graduates and the great recession. New Brunswick, NJ: John J. Heldrich Centre for Workforce Development and Edward J Bloustein School of Planning and Public Policy.
44.
SweetE.NandiA.AdamE. K.McDadeT. W. (2013). The high price of debt: Household financial debt and its impact on mental and physical health. Social Science & Medicine, 91, 94–100.
45.
TayL.BatzC.ParrigonS.KuykendallL. (2017). Debt and subjective well-being: The other side of the income-happiness coin. Journal of Happiness Studies, 18, 903–937. doi:10.1007/s10902-016-9758-5
46.
van PraagB. M. S.FrijtersP.Ferrer-i-CarbonellA. (2003). The anatomy of subjective well-being. Journal of Economic Behavior and Organization, 51, 29–49. doi:10.1016/S0167-2681(02)00140-3
47.
WalsemannK. M.GeeG. C.GentileD. (2015). Sick of our loans: Student borrowing and the mental health of young adults in the United States. Social Science & Medicine, 124, 85–93. Retrieved fromhttps://doi.org/10.1016/j.socscimed.2014.11.027
48.
WoodD.CrapnellT.LauL.BennettA.LotsteinD.FerrisM.KuoA. (2018). Emerging adulthood as a critical stage in the life course. In HalfonN.ForrestC. B.LernerR. M.FaustmanE. M. (Eds.), Handbook of life course health development (pp. 123–143). Cham, Switzerland: Springer. doi:10.1007/978-3-319-47143-3_7
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
