How Student Debt Affects Personal Choices Of Young People

Researchers examine the effects of student debt on the personal choices that young adults have to make. For example, decisions about whether to get married or when to have children.

DAVID GREENE, HOST:

Student debt has been a huge topic of conversation in this year's presidential election. And that got us thinking back to an interview we did last year with a student Amber Michael who owed $92,000 in student loans.

(SOUNDBITE OF ARCHIVED BROADCAST)

AMBER MICHAEL: It is what it is. I make enough money to pay my bills every month, so I am not too overstressed about it. And one day, I'll take care of it. But it is stressful to think about it. It does kind of hold you back from doing other things sometimes. But...

GREENE: Like what?

MICHAEL: Like, getting married and having kids - those things would be great. But I'd like to be in a better financial position before we take those on.

GREENE: You say we.

MICHAEL: Yeah, me and my partner.

GREENE: All right. I was listening to Amber's voice there with NPR social science correspondent Shankar Vedantam who's with me in the studio. And because of student debt, she's delaying things like getting married, having kids. And you've been looking at some research suggesting this is widespread.

SHANKAR VEDANTAM, BYLINE: That's right, David. I was speaking with Dora Gicheva. She's an economist at the University of North Carolina. She analyzed survey data that tracked about 2,500 young people. The survey was part of an unrelated study analyzing how people make the decision to get an MBA. It asked people lots of questions before they took the GMAT examination and then tracked them over several years.

And among the questions it asked were - are you married? Do you plan to get married in the next couple of years? It also asked them, in time, about the amount of debt they were carrying. Gicheva told me there was a connection between the amount of debt people carried and the personal choices these people were making about love and marriage.

DORA GICHEVA: I found that holding student debt decreases the likelihood of getting married. So roughly four years after graduation, those students who hold student debts were less likely to be married.

VEDANTAM: For every $10,000 young people carried in student debt, David, Gicheva found the likelihood of getting married in the seven years following graduation dropped by about 3 or 4 percentage points.

GREENE: It's amazing. So she's actually listening to what students said before they ever went to graduate school and started taking on this debt and how their decisions changed and how they were delaying things once they took on all of that debt. I mean, this - if this is widespread, I mean, this could have some serious implications - right?

VEDANTAM: It can have serious implications. And of course, the question of student debt has become a big issue in the presidential campaign in all kinds of ways. You know, you could argue at one level that the study is providing empirical confirmation of something we might have guessed intuitively, which is that debt has effects on your personal decisions. Gicheva thinks this is true. But when she analyzes a subset of young people who told the survey researchers that they expected to get married soon, she finds a disconnect that these young people didn't seem to fully appreciate the extent that student debt can have on their lives.

GICHEVA: When students make their borrowing decisions, they know that yes, I'm going to have to repay this debt. And I'm going to have to live more frugally after graduation. But I don't think they capture the full extent of the consequences of holding student debt. I don't think they expect that different aspects of their life will be affected.

GREENE: This is suggesting that, I mean, one thing, as students are thinking about graduate school, someone should be telling them that this student debt, I mean, could really affect your life in profound ways.

VEDANTAM: That's right. I think most students who take on debt do so because they figure once I get a good paying job, I'm going to pay off these loans. And in the long run, my education is going to be a good investment. Now, that's true on average. But of course, it's only true on average. There are going to be some people, by definition, whose outcomes fall below average. And there are psychological reasons why most of us don't expect to be in the below-average group. So then it falls on, you know, institutions and teachers and parents to do a better job communicating the potential risks and for policymakers to address this growing problem of student debt.

GREENE: All right. Shankar, thanks as always.

VEDANTAM: Thanks, David.

GREENE: That's NPR's Shankar Vedantam. He's NPR's social science correspondent. He's also the host of a podcast that explores the unseen patterns in human behavior. It's called Hidden Brain.

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