Young people “experience debt as empowering,” according to a study, and the effect is strongest for people who come from the poorest families.
Researchers looked at the responses of 3,079 people from 1979 to 2004, in the National Longitudinal Survey of Youth. They ranged in age from 18 to 34, although most were in their early-to-mid 20s. The survey included data about credit-card and educational debt, and measures of respondents’ self-esteem and sense of mastery.
For students from families in the bottom 25% of income, self-esteem and perceived mastery rose steadily with both educational and credit-card debt. The education itself didn’t drive the rise in self-esteem; given two people with the same demographics and schooling, the one with higher debt had higher self-regard. Similar but less-consistent effects were found for students from families in the broad middle income ranges.
Only at age 28 did educational debt (though still not credit-card debt) become a drag on self-esteem.
Something kicks in around age 28, maybe common sense?
Wall Street Journal - ”Youth Debt, Mastery, and Self-Esteem: Class-Stratified Effects of Indebtedness on Self-Concept, Rachel E. Dwyer, Laura McCloud and Randy Hodson, Social Science Research (May)