Unraveling the Impact of Student Loans on Financial Wellness

Student loans can have a significant negative impact on a borrower’s financial well-being [2: https://onlinelibrary.wiley.com/doi/full/10.1111/joes.12124, 3: https://www.federalreserve.gov/econres/notes/feds-notes/non-completion-student-debt-and-financial-well-being-20230821.html, 4: [invalid URL removed], 5: [invalid URL removed], 6: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7814862/]. Here’s a breakdown of some key effects:

• Reduced net worth and asset accumulation: Student loan payments can limit disposable income, making it harder to save for a down payment on a house or invest for retirement [2: [invalid URL removed]: [invalid URL removed]].
• Delayed milestones: Debt burdens can postpone major life events like getting married or having children [2: https://onlinelibrary.wiley.com/doi/full/10.1111/joes.12124]. Borrowers may also delay pursuing higher education due to existing loans [3: https://www.federalreserve.gov/econres/notes/feds-notes/non-completion-student-debt-and-financial-well-being-20230821.html].
• Psychological stress: The pressure of managing student loan debt can be a significant source of stress and anxiety, impacting overall well-being [6: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7814862/].

It’s important to note that the impact of student loans can vary depending on the amount borrowed, the borrower’s income, and their overall financial management strategies.

Sources

• Utah State University: https://digitalcommons.usu.edu/cgi/viewcontent.cgi?article=9468&context=etd – Determinants of the Student Loan Decision and Financial Well-Being
• Wiley Online Library: https://onlinelibrary.wiley.com/doi/full/10.1111/joes.12124 – STUDENT DEBT EFFECTS ON FINANCIAL WELL‐BEING …
• Federal Reserve: https://www.federalreserve.gov/econres/notes/feds-notes/non-completion-student-debt-and-financial-well-being-20230821.html – Non-Completion, Student Debt, and Financial Well-Being
• ResearchGate: [invalid URL removed] – Student debt effects on financial well-being: Research and policy implications
• Members 1st Credit Union: [invalid URL removed] – The Impact of Student Loan Debt on Your Financial Wellness
• https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7814862/ – Does Student Loan Debt Hinder Community Well-Being?