Student Debts Weigh Heavily on Financial, Physical Well-being

Medical school graduates carry substantial amounts of student loan debt, which can negatively affect their well-being, according to an analysis of Americans who graduated college between 1990 and 2014.

Graduates who took on the highest amount of debt—$50,000 or more—are less likely than those who did not borrow money for college to thrive in their purpose, social, financial, community, and physical well-beings, according to the inaugural Gallup-Purdue Index.

The index measure areas of well-being are:

• Purpose: liking what you do each day and being motivated to achieve your goals

• Social: having supportive relationships and love in your life

• Financial: managing your economic life to reduce stress and increase security

• Community: liking where you live, feeling safe, and having pride in your community

• Physical: having good health and enough energy to get things done daily

The study found financial and physical well-being are the 2 areas where graduates with no debt are doing significantly better than their indebted peers. In social well-being the differences between the groups are not statistically significant, according to Gallup.

“Student debt is linked to lower financial, purpose, physical, and community well-being,” wrote Andrew Dugan and Stephanie Kafka, for Gallup. “Notably, well-being is worse for students taking out more than $50,000 worth of student debt, suggesting student debt is most problematic when it is substantial.”

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The Gallup-Purdue Index only looked at undergraduate degree student loans, which is far less than the amount of debt that medical students graduate with. According to the American Academy of Medical Colleges, the class of 2013 graduated with a median debt load of $175,000, up 3% from the year before.

The average amount of student loan debt for the undergraduate class of 2014 is only $33,000, according to Gallup. In the index, 41% of graduates between 1990 and 2014 had no student loan debt and 11% borrowed more than $50,000.

Even older graduates who took out larger loans have lower financial, physical, and purpose well-being compared to their peers who had not taken out loans. The difference remains even though these graduates have likely paid off their loans by now.

Gallup surmises that the negative effects of possessing and repaying debt may not disappear even once the financial obligation is fulfilled. The years paying down debt instead of saving more may lead to financial insecurity and the physical health programs associated with debt could continue to persist, according to Gallup’s report.

“Although the analysis clearly shows a link between student debt and well-being that continues later if life, the mechanisms driving that relationship are unclear and cannot be established by this study,” Dugan and Kafka conclude. “Specifically, it is unclear if the debt itself and its effect on future life events drags down a person's well-being, of if the conditions that lead one to borrow for college, such as family income, are related to well-being and have effects that persist later in life.”