06/17/2011 09:15 pm ET Updated Aug 17, 2011

Debt Boosts Self Esteem In Young People

Originally published on, the premier source for youth generated news throughout the globe.

By: Robyn Gee

Last year, the Wall Street Journal reported that student-loan debt was higher than credit card debt. Why are young people so eager or unafraid to take out educational loans? According to Rachel Dwyer, associate professor of sociology at Ohio State University, debt increases young peoples' self esteem.

"Because of the recent financial crisis, we were interested in young people because these generations are coming of age with unprecedented access to credit," said Dwyer. "We wanted to know how this affects a young person's transition to adulthood."

Dwyer found that 18-to-27 year olds with more college-loan debt and credit card debt have higher self-esteem, although research is still being conducted to figure out the specific correlation. Because the data isn't quite that universal. It turns out that the self-esteem boost is strongest for young people from low-income backgrounds, while young people from middle class backgrounds show a milder positive effect, and young people from higher income backgrounds don't demonstrate these effects at all.

But all of a sudden, they reach age 28. People over the age of 28 with more debt have lower self-esteem than their peers with less debt. Dwyer said, "That suggests that if youth are seeing debt as a positive thing, it wears off when they have a better sense of what their incomes will be." She said her team is pursuing research to see if that's true, by tracking the same individuals over time.

To measure self-esteem, Dwyer used two tests:

- The Pearlin Mastery Scale, which asks questions like: Do you feel like you can solve problems in your life? Are you pushed around or bullied? Do you have the ability to accomplish what you can set your mind to?

- The Rosenberg Self-Eesteem Scale, which asks the participant to rank statements like: I feel I am a person of worth. I feel like I'm a failure I have good qualities.

So, should we be glad that debt isn't sending young people into depression? Dwyer says we can't take this data to mean that everything is peachy. "It's important that we look at young people and their experiences with debt. We need to pay attention to how these experiences change over time," she said. "Young adults may feel that they need to use [debt/loans] as a resource to achieve their goals, but as a society we need to consider whether this is how we want young adults to achieve," said Dwyer.

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