College Debt = Student Stress

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It’s hardly surprising that debt causes stress, but this condition seems rampant among the college crowd.

A new study in the Journal of Financial Therapy finds that nearly three out of four students feel stressed about their personal finances, and student loans are a big reason.

In 2012, the average graduating senior owed $29,400. Student debt has already been shown to be a barrier to homeownership and a cause of bankruptcy among young adults. Paying back the loans is also very difficult when borrowers don’t graduate and earn less in their jobs. Add stress to the host of issues that accompany borrowing for college.

Students who have debt or expect to be in debt after college – whether college loans, credit cards, or car loans – are “significantly more likely to report financial stress” than students who did not have any debt, the study reported.

This finding was based on a survey of nearly 4,500 Ohio college students who answered 100 questions in the Ohio Student Financial Wellness Survey in late 2010. The study controlled for a range of factors, including race, grade point average, sex and the type of institution attended – public or private.

Debt combines with coming-of-age issues, such as peer pressure, to heighten college borrowers’ stress levels. For example, one of the largest sources of stress was not being able to afford to participate in activities with their peers, the researchers found. Spending more than one can afford and borrowing to fill the holes also contributed to stress levels.

Stress can lead to depression, anxiety, lower academic performance, and difficulty completing a degree. Student debt can be a heavy load to carry.