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The Devastating Psychological Burden of Student Loans

Research shows there's something particularly noxious about student loan debt.

Hsengkeungmurng99 / Pxhere
Source: Hsengkeungmurng99 / Pxhere

All financial debt is unpleasant. But a recent study published in the Journal of Experimental Psychology suggests there is something especially bad about student loan debt.

According to the authors of the research, led by Adam Greenberg of Bocconi University in Italy, it involves the way we mentally categorize different forms of debt. Home mortgages, for instance, are viewed more as an investment than a debt. Credit card debt is viewed as an expense. Student loan debt, on the other hand, is increasingly viewed as an insurmountable burden—a sentiment aptly reflected in the response submitted by a participant in Greenberg’s study:

“My family has a mortgage which to me really isn’t debt but more of an investment. I used to feel the same about student loans until you end up having a degree but unable to find a career in your field. Then, it’s just horrible debt.”

“We found that the extent to which consumers mentally label a given debt type as ‘debt’ drives the emotional consequences of those debt holdings,” state the researchers. “Compared to the other debt types, student loans are perceived more as ‘debt.’ Together the findings suggest that carrying debt can spill over to undermine people’s overall subjective well-being, especially when their debt is perceived as such.”

To come to this conclusion, the scientists examined data from over 5,800 U.S. adults who reported how much (1) student loan debt, (2) credit card debt, and (3) mortgage debt they currently held. The data also included a measure of life satisfaction (“How would you rate your life overall these days?”). This allowed the scientists to test the association between the three different forms of debt and current happiness.

They found that student loan debt was the only form of debt associated with lower levels of life satisfaction: the more student loan debt people held, the less likely they were to rate high on life satisfaction. Furthermore, the relationship between life satisfaction and debt was mostly unrelated to the size of the debt. Even though individuals carried more home mortgage debt ($40,000, on average) than student loan debt ($8,600, on average)—and even though credit card debt was the costliest debt in terms of its interest rates—it was student loan debt that was most predictive of decreases in life satisfaction.

Their best explanation for this result was that student loan debt is somehow perceived as more psychologically burdensome than other forms of debt. To test this idea, they conducted a follow-up study in which they asked 1,008 U.S. adults whether they had any of the three forms of debt and, if so, to rate the extent to which they perceived their mortgage/credit card/student loans as "debt" (1 = not at all, 7 = very much).

The results supported their hypothesis. First, they found that 36 percent of people reported having mortgage debt, 38 percent reported having student loan debt, and 73 percent reported having credit card debt. Crucially, they reported that people were significantly more likely to view their student loans as "debt" (averaging 6.39 on the 7-point scale shown above) than mortgages (5.44) and credit card balances (5.71).

The researchers conclude, “In line with the argument that the relationship between money and subjective well-being might have more to do with the way consumers spend their money than how much money they have, this research suggests that the relationship between debt and subjective well-being might have more to do with what consumers borrowed the money for than how much they owe.”


Greenberg, A. E., & Mogilner, C. (2020). Consumer debt and satisfaction in life. Journal of Experimental Psychology: Applied. Advance online publication.

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