Can Debt Improve Young Adult’s Self-Esteem?

According to a new study, college loan debt and credit card debt can actually increase a person’s self-esteem and sense of mastery. Researchers looked at young adults and found that those between the ages of 18-27 felt more empowered by carrying debt. “Debt can be a good thing for young people – it can help them achieve goals that they couldn’t otherwise, like a college education,” said sociologist Dr. Rachel Dwyer of Ohio State University. “Debt can be a positive resource for young adults, but it comes with some significant dangers,” Dwyer said. “Young people seem to view debt mostly in just positive terms rather than as a potential burden.”

Researchers looked at over 3,000 young adults all carrying both student loans and credit card debt. Experts view debt both positively and negatively. “We thought educational debt might be seen as a positive because it is an investment in their future, while credit card debt could be viewed more negatively,” Dwyer said. “Surprisingly, though, we found that both kinds of debt had positive effects for young people. It didn’t matter the type of debt, it increased their self-esteem and sense of mastery.”

The researchers also discovered those in the lowest income bracket actually received the largest benefits from their debt. Young adults in the middle class sector saw little or no change on their sense of mastery and self-esteem due to the fact that most young adults in this income bracket carry similar debt. And students in the highest income brackets saw no increase in self-esteem from carrying the debt. “The wealthiest young people have the most resources and options available to them, so debt is not an issue for them,” Dwyer said. “The groups that most need the debt – the middle and lower classes – get the most benefits to their self-concept, but may also face the greatest difficulties in paying off what they owe.”

© Copyright 2011 by By Noah Rubinstein, LMFT, LMHC, therapist in Olympia, Washington. All Rights Reserved. Permission to publish granted to

The preceding article was solely written by the author named above. Any views and opinions expressed are not necessarily shared by Questions or concerns about the preceding article can be directed to the author or posted as a comment below.

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  • Johnny H

    Johnny H

    June 11th, 2011 at 2:48 PM

    How irresponsible of you to encourage accumulating debt for anyone especially someone who is so young! Debt can be crippling. Find another way to encourage responsibility. It does not have to be by going into the black hole of debt by the time you are 20.

  • Philip Riggs

    Philip Riggs

    June 11th, 2011 at 9:42 PM

    It’s crazy for students to relate debt to positivity. I remember when I got my student loan feeling so proud that I’d qualified for this and got all this money. I didn’t know then that banks fall over themselves to give you those first loans, bank accounts, mortgages etc. so they can become your bloodsuckers for the rest of your life.

    So yeah I understand their reaction, naive as it is.

  • Justus


    June 11th, 2011 at 10:41 PM

    The idea of major debt kept me out of graduate school for a while. When I came to see debt as an initiation in American adult life, I did feel better about it and I’m glad I took it on. Not being in debt and not having a career I’m excited about wouldn’t have been worth the money.

  • J. Jones

    J. Jones

    June 11th, 2011 at 11:23 PM

    Debt is nothing to be proud of and carrying a student loan on your back in the first years of earning is a big burden. The sense of mastery is an illusion and wears off fast when you realize after graduation the tens of thousands you’re under water for now for about a decade at least.

    Debt’s the master and you’re the slave.

  • Brent H.

    Brent H.

    June 11th, 2011 at 11:33 PM

    Heck, when I was approved for my first mortgage I felt like I’d won the lottery! LOL. I totally get the self esteem boost notion.

    Little did I know how much it would be suck later to be making the same payments on a house that, thanks to the continuing recession and poor economy, is now worth about half what I paid for it (and am paying).

    If I had my time over, I’d never commit to a fraction of the loans I’ve had since college because you spend so much paying off the interest.

    Colleges: please teach these kids to find something else to base their self-esteem on that’s not related to money and definitely not debt, and while you’re at it, how to save up for what you want like their grandma and grandpa used to do!

  • Ginger


    June 12th, 2011 at 4:43 AM

    I kind of agree that a little bit of debt can be used in a good way and go a long way toward teaching kids who are so young the right ways that they can manage their money and be in control of their finances. If they are never given any responsibilities like this when they are growing up then more than likely they are going to be destined to really screw it up big time when they are adults!

  • Louise Daniels

    Louise Daniels

    June 12th, 2011 at 11:44 PM

    No offense but this is really sounding like some kind of propaganda for loan companies. It’s not a good thing to have debt. We aren’t empowered by it, and if we are smart we want to get rid of it and get rid of it yesterday.

  • Alvin W.S.

    Alvin W.S.

    June 13th, 2011 at 1:37 AM

    @Louise Daniels –I had some nasty debts in college that mounted up to where I just outright quit completely and stopped adding more to it. I paid off my cards, sliced them up, and got rid of the debt a few years later.

    I didn’t look back for a millisecond although I had to live like the pauper I truly was for a very long time to achieve that instead of spending like a king money I didn’t truly have!

    When you put it on credit cards, it doesn’t feel like you’re spending real money. That’s how they get you into their clutches.

  • Paula


    June 13th, 2011 at 4:30 AM

    Managing debt effectively is one thing. But I hardly see that juggle as a self esteem booster. And there are plenty of other ways to boost the self esteem of someone who is young instead of saddling them with money and payments right off the bat. Why not be encouraging? Why not set them on the path to effective money management early in life so that debt is something that could possibly be avoided?

  • philip


    June 13th, 2011 at 6:20 AM

    well,if a person has taken student loan for his studies and it inspires him to do well in academics to repay the loan then that is fine.but I don’t get why anybody would be happy to carry a’s simply a means you are spending more than you could this be a good thing?!

  • James


    June 13th, 2011 at 7:47 AM

    Well, I can see some validity to this concept. While I don’t find my personal debt to be all that gratifying, learning generally takes place after making mistakes. Doing what needs to be done in spite of difficulty can be very rewarding. I think this applies to a lot more than debt, and I agree there are better ways of learning this lesson. That said, I think that financial understanding is severely lacking in the upcoming generations, and if an experience like this can increase their future quality of life then so be it. It’s better that it happen before things like a mortgage and family come into the picture to further complicate the situation. We (I’m primarily referencing those of us in the US) are a society that lives on debt and credit, and if no one is going to teach them then who or what will? There are programs and workshops at many colleges today to teach financial management and responsibility to new students. Even if it were mandatory, you can’t make them learn or act responsibly.



    June 13th, 2011 at 5:57 PM

    Well in that case our country sure has plenty of self esteem…The largest in the world to be precise!

  • Allen T. Samuels

    Allen T. Samuels

    June 13th, 2011 at 9:27 PM

    I have -never- come across anybody who can say that debt has its advantages. Ever. Anyone who says anything nice about debt is either about to get out of it or are joking about theirs and their lack of money.

    If the banks called it a debt card and not a credit card, maybe these youngsters wouldn’t feel so proud. Banks are as much to blame as the students are. They hype it up and manipulate them into thinking it’s so great to have credit!

    Try saying it’s so great to have debt. Doesn’t quite have the same ring to it, does it.

  • Oliver


    June 14th, 2011 at 4:42 AM

    If the kids have the parents leading them in the right direction and give them the right kind of guidance about handling debt responsibly then I can see how this would not necessarily be the end of the world. But while I think we all want our kids to be money savvy we do not want them to have to get in over their heads in debt to learn that lesson.

  • Una Ewing

    Una Ewing

    June 14th, 2011 at 10:52 PM

    The only time I ever feel good about a debt is when I pay it off and I can start making fun of the lenders because they don’t have any hold over me.

    When I have debts to pay, I feel completely miserable about them because most legitimate lenders are no better than common loan sharks.

  • Bradley Hutchins

    Bradley Hutchins

    June 15th, 2011 at 11:29 PM

    Even though it can teach responsibility, there is absolutely nothing else that’s good about being in debt whatsoever. I find it hard to believe these results. Nobody feels good about having it in the first place, or having to get into it to survive. It must be the sheer novelty of having access to funds of your own that your parents didn’t give you that makes these kids feel good.

    The students should have to attend an obligatory money management class before the funds are released. Of course the banks would never be that responsible as to offer to provide that on campus. All they care about is getting them to sign on the dotted line.

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