Does Education Loan Debt Influence Household Financial Distress? An Assessment Using the 2007–2009 Survey of Consumer Finances Panel

18 Pages Posted: 31 Aug 2016

See all articles by Jesse Bricker

Jesse Bricker

Board of Governors of the Federal Reserve System

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston; Federal Reserve Board of Governors

Date Written: October 2016

Abstract

Families with student loans in 2007 have higher levels of financial distress than families without such loans, and these families also transitioned to financial distress at higher rates during the early stages of the Great Recession. This correlation persists once we control for a host of other demographic, work‐status, and household balance sheet measures. Families with an average level of student loans were 3.1 percentage points more likely to be 60 days late paying bills and 3 percentage points more likely to be denied credit. Families with other types of consumer debt were no more or less likely to be financially distressed.

JEL Classification: D14, H81, I22

Suggested Citation

Bricker, Jesse and Thompson, Jeffrey P., Does Education Loan Debt Influence Household Financial Distress? An Assessment Using the 2007–2009 Survey of Consumer Finances Panel (October 2016). Contemporary Economic Policy, Vol. 34, Issue 4, pp. 660-677, 2016, Available at SSRN: https://ssrn.com/abstract=2832457 or http://dx.doi.org/10.1111/coep.12164

Jesse Bricker (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Federal Reserve Board of Governors ( email )

Washington, DC 20551
United States

HOME PAGE: http://https://www.federalreserve.gov/econres/jeffrey-p-thompson.htm

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