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Proud to Owe: Why Young People Feel Good About Debt

A recent study out of Ohio State University concludes that young people in debt view their borrowing as a source of pride. The more they owe the better they feel about themselves.

I noted the study in a recent tweet and didn't expect to come back to it because, initially at least, the findings seemed so absurd as to be without credibility. How can anyone feel better as a result of owing a lot of money? It makes no sense.

Comments from the lead researcher, Rachel Dwyer, an assistant professor of sociology, didn't seem to wash. "Debt can be a good thing for young people," she said. "It can help them achieve goals that they couldn't otherwise, like a college education." Dwyer said she was not surprised to find positive feelings associated with college loans.

Well, I am. It's the education that should make a young person feel good -- not the debt taken on to get the diploma. Dwyer further found that even credit-card debt correlated with higher self-esteem, which she admitted shook her at first. But she reasons that at least in some cases the credit-card debt is from textbooks and other education expenses, which help a young person advance. So they see it as no biggie.

To be clear, Dwyer examined two types of debt: loans taken out to pay for college and total credit-card debt. She looked at how both were related to young people's belief that they were in control of their life and had the ability to achieve their goals. For those aged 18 to 27 the greater their debts "the higher their self-esteem and the more they felt like they were in control of their lives."

This was most evident at lower income levels and, blessedly, these feelings began to reverse after age 28 when one assumes the bills were beginning to come due in earnest.

I've decided that I can't dismiss these findings as an aberration. But I don't believe for a minute that anyone actually feels good about owing money. For an idea of how education debt really makes you feel, read my recent series on student loans. I interviewed dozens folks in their 30s, 40s and 50s who are still paying their college bills.

The message of Dwyer's study is not that debt makes kids feel good about their investment in themselves; it's that debt makes them feel like...their parents. We long ago crossed the cultural divide from post-Depression thriftiness to full-on debt-fueled consumerism. Now we've burned the bridge.

Yes, the Great Recession has restored a level of frugality -- even in young people. But we remain oh-so willing to borrow for things we think we need. Young people see going into hock as the natural order; they see owing creditors tens of thousands of dollars as completely normal, even wise. Revolving credit and a monthly nut are rites of passage. They stamp you as an adult.

That's why the young people in the Dwyer study felt better owing money. It made them feel all grown up, which is scary stuff that promises to keep debt collectors in business long after the economy gets back on track.

Photo courtesy Flickr user alancleaver
Student loan series:
· Student Loans: How One College is Turning the Tide
· How Excessive Debt Limits Career Options
· Surprising Ways Debt Diminishes Campus Life
· Common Money Mistakes in College
· 8 Ways to Wipe Out Your Student Debt
· Student Loans: How They Changed One Life for Decades
· Student Loans: How They Changed Another Life for Decades
· Student Loans? First Pass This Test
· College: The Flawed Case Against Getting a Degree
· The Top Reason Kids Don't Learn Money at School
· Teaching Kids About Money, What We're Up Against
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