Student Loan Debt and Financial Well-Being of the Borrower: Does It Matter Whom the Debt Is For?

Using data from the 2017 U.S. Survey of Household Economics and Decisionmaking (SHED), this study classifies student debt into three categories by beneficiary (self, spouse, and children) and examines the relationship between each category and financial well-being. The results show that the association of student debt with the financial well-being of borrowers is negative and significant, regardless of whether the loan is used to finance the education of the borrower, spouse, or children. The paper further finds evidence that the marginal effect of student debt on the financial well-being of the borrower is substantial when the debt is used to finance the education of children rather than the education of the borrower or the borrower’s spouse. The implications of the study for practitioners are discussed.Immediate accessThis item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu