How Do Students Feel About Taking on Debt in College?

A study on student attitudes toward acquiring debt and self-esteem was conducted by a team of three sociology researchers from Ohio State University.  They studied attitudes toward acquiring debt while attending universities around the United States.  The research was conducted on 3,079 young adults aged 18 to 34 who were interviewed, in-person, every two years from 1986 through 2004.

The results were that the students were empowered by student loan and credit card debt.  The more they owed, the more they felt control over their lives and had greater self-esteem.  Credit cards allowed them to buy non-essentials immediately without having to wait until they saved the money. The older respondents did have a positive view of debt but as time went on, student loan debt had an impact on self-esteem.

The opinions varied by family income

Those from the bottom 25% of income had higher self-esteem for carrying both credit card and student loan debt.  Student loans were a conscious choice.

Those from middle-income families had higher self esteem having credit card debt, while student loan debt was the norm. They had positive sense of self-control and self worth.

Those from to top 25% of income didn’t have a difference in self esteem between student loans and credit card debt.

Unexpected findings

The findings weren’t as expected; the students weren’t concerned about the debt they had acquired. The researchers thought student loans would be viewed positively because it was an investment for the future and credit card debt would be considered more negative. The students viewed both as positive. It could be that credit cards were also used for some college expenses such as text books.

This study was conducted before the recession in 2009 and Credit Card Accountability Responsibility Disclosure Act of 2009, or CARD Act, which went into effect largely on February 22, 2010. The recession made it more difficult to obtain loans and credit.  The CARD Act prohibits those below 21 years old from getting a credit card, unless they have a job or co-signer. These eliminated credit card companies going on campuses and signing them up for a credit card.  Students will no longer be able to get a credit card in their name without getting their parents to co-sign for it.

These students may have a surprise after they leave college, get their first job and begin to pay off the debt they have acquired.  It will be interesting to see if this attitude toward credit card and student loan debt changes.  Recently student loan debt has surpassed credit card debt and these students have both debts. Student loan debt is very difficult to get dismissed or include in bankruptcy.  Student loans are reported to the credit reporting agencies and can harm credit for a long time if they are in default or paid irresponsibly.

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Leave a Reply