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Our most academic publication offers research and surveys on monetary policy, national and international developments, banking, and more. The content is written for an economically informed readership—from the undergraduate student to the PhD.


Vol. 95, No. 5 (Posted 2013-10-01)

Is Student Debt Jeopardizing the Short-Term Financial Health of U.S. Households?

by William Elliott and IlSung Nam

In this study, the authors use the Survey of Consumer Finances to determine whether student loans are associated with household net worth. They find that median 2009 net worth ($117,700) for households with no outstanding student loan debt is nearly three times higher than for households with outstanding student loan debt ($42,800). Further, multivariate statistics indicate that households with outstanding student loan debt and a median 2007 net worth of $128,828 incur a loss of about 54 percent of net worth in 2009 compared with households with similar net worth levels but no student loan debt over the same period. The main policy implication of this study is that outstanding student debt may jeopardize the short-run financial health of households. However, this topic is complex and more research is needed before suggesting policy prescriptions.

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