Study Shows Debt May Be Empowering

Debt has always been viewed as a bad thing, but a recent study shows young adults might be looking at it a little differently.

Lloyd Lee, a recent graduate from Brigham Young University-Idaho, said he couldn’t have made it through his college career without taking out student loans and racking up credit card debt.

“I took out quite a bit because I didn’t really have the option to get family help,” said Lee.

A study done by Ohio State University says Lee is not alone in borrowing money at a young age to get through school.

In fact, according to the study, young adults from the ages of 24-27 said they have a higher self-esteem and feel more in control of their lives as a result.

“It felt good that it was my choice and my responsibility,” said Lee.

Even though student loans and credit cards may create a sense of empowerment in young adults, experts recommend moderation.

That feeling of empowerment changes as the debt adds up and the money is due.

The oldest of those studied, from ages 28-34, began showing signs of stress.

Professor Todd Blanchard with the BYU-Idaho Accounting Department said the feeling of empowerment isn’t worth it.

“We wouldn’t recommend to students that they take more loans than they need to take. They need to keep them at a minimum in order to get through school,” said Blanchard.

Not all students think it’s cool to go into debt or get loans and credit cards.

Sophomore Amber Merrill receives financial help from her parents.

“I still feel pretty independent about it. I moved away from home, so it still gives me a sense of independence, whether I have a loan or not,” said Merrill.

The study conducted at OSU included 3,079 young adults and the findings appear in a recent issue of “Social Science Research”, if you’re interested in reading more.