College students who borrow large sums of money are not just more likely to struggle financially; they’re also more likely to report worse health and a lesser sense of purpose, even decades after they graduate.
That’s according to a new survey of more than 11,000 adults who graduated from 1990 to 2014, 59 percent of whom had undergraduate student debt. The survey—which was conducted by the Gallup-Purdue Index, a collaboration between the polling firm and Purdue University—asked graduates to assess whether they were "thriving," "struggling," or "suffering" in several aspects of their lives.
It found that borrowers were less likely than nonborrowers to say they were thriving in four dimensions of well-being: financial ("managing your economic life"), physical ("having good health and enough energy to get things done daily"), purpose ("liking what you do each day and being motivated to achieve your goals"), and community ("liking where you live, feeling safe, and having pride").
The only sphere where debtors weren’t at a disadvantage was in their social lives. Graduates with the heaviest debt burdens were about as likely to say they were thriving socially as their less-indebted or debt-free peers.
Not surprisingly, the starkest difference among the groups appears when it comes to financial well-being. Even borrowers with modest amounts of debt—$25,000 or less—were significantly less likely than nonborrowers to report that they were thriving financially. The "thriving gap" grew as debt levels increased, reaching 15 percentage points for borrowers with more than $50,000 in debt.
Of course, it doesn’t take a study to demonstrate that student debt can be a financial burden. But the persistent gaps in feelings of physical well-being were less expected. In that sphere, just over a quarter of the most indebted borrowers said they were thriving, 10 percentage points lower than the nonborrower group.
On all five measures of well-being, more recent borrowers—those who graduated in 2000 or after—were less likely to be thriving than those who graduated from 1990 to 1999. But borrowers who graduated 15 to 25 years ago weren’t faring all that much better.
So what, if anything, does it all mean?
To be sure, most undergraduates don’t borrow $50,000 or more. According to the College Board, roughly 60 percent of students who earned a bachelor's degree at the public or private nonprofit college where they began their studies graduated with debt in 2011-12. The average debt load of those students was $26,500. Among the adults surveyed by Gallup, only 11 percent had $50,000 or more in debt.
And as the survey’s authors point out, the findings don’t prove that student-loan debt leads to lower well-being. It could simply be that factors that lead students to borrow, such as family income and socioeconomic status, are linked to well-being later in life.
But the survey suggests that even borrowers who take on modest amounts of debt are more likely than nonborrowers to face long-term challenges that extend beyond their finances. As the survey’s authors put it: "The legacy of high student debt may be lower well-being that lasts for many years after graduates receive their diplomas."