Student Loans Are Making You Financially and Physically Ill


NEW YORK (MainStreet) — That college diploma likely came with a substantial price tag. And the greater the student loan debt, the more it impacts your well-being. Joint research by Purdue University and the Lumina Foundation finds that college graduates who carry the highest load of student debt -- $50,000 or more – are not only behind their debt-free peers financially but also physically. That debt is dragging you down in more ways than one.

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"Graduates who went the deepest into debt to obtain their college degree, for instance, are far less likely to be thriving than graduates who took out no debt, by 15 percentage points in financial well-being and 10 points in physical well-being," a Gallup analysis of the data states.

The study considered more than 11,000 Americans who graduated college between 1990 and 2014. Compiling the data into a "Well-Being Index," the results are categorized according to:

  • Sense of purpose: Liking what you do each day and being motivated to achieve your goals
  • Social well-being: Having supportive relationships and love in your life
  • Financial well-being: Managing your economic life to reduce stress and increase security
  • Community well-being: Liking where you live, feeling safe, and having pride in your community
  • Physical well-being: Having good health and enough energy to get things done daily

"Relatively recent college graduates -- those who earned their degree from 2000 to 2014 -- who have more than $50,000 in student debt are significantly less likely to be thriving financially and physically than their counterparts without loans," Gallup says. "They are also less likely to have a strong sense of purpose and to be thriving in their community well-being."

Considering a long 25-year span of college graduates, the research also reveals significant well-being differences among older graduates. Those who graduated in the '90s and borrowed more than $50,000 have lower financial, physical, and purpose well-being compared with those who never took out loans.

"There are many possible reasons why those who took out student loans more than 20 years ago still have lower financial, physical, and purpose well-being today," the Gallup analysis says. "The possession and repayment of debt is known to have negative ripple effects that might not disappear once the financial obligation does. It may be, for example, that the years spent paying down debt rather than securing savings leads to financial insecurity, or that the physical health problems that are often associated with debt persist."

The well-being gap widens with the student debt load, according to the study.

"Notably, well-being is worse for students taking out more than $50,000 worth of student debt, suggesting student debt is most problematic when it is substantial," Gallup says.

--Written by Hal M. Bundrick for MainStreet

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