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You may associate wealth with a fat paycheck, but there’s more to it than that. When it comes to net worth, it’s not only what you make — it’s what you borrow.

The net worth of households headed by young, college-educated adults without student loans ($64,700) was about seven times greater than that of their student debt-laden peers ($8,700), according to a new analysis by Pew Research Center. The report is based on the 2010 Survey of Consumer Finances, the most recent data available. Pew focused on the 1,711 households headed by people younger than 40.

The situation among those with less education is worse: The median net worth of those without a college degree or student debt ($10,900) was nine times that of young adults with debt obligations and no college degree ($1,200).

The Debt Domino Effect

Student loans aren’t solely responsible for the deficit. Households with education debt also had more debt overall (including mortgage, personal, credit card and auto loan debt), with a median debt load of $137,010, compared to $73,250 among the college educated without student loans. The difference between the less-educated consumers was more extreme: $28,300 versus $2,500.

The data isn’t so much shocking as it is depressing. Debt can be cyclical, but students often don’t consider that when choosing colleges. This report didn’t analyze the driving factors of debt among student borrowers, but the excessive debt loads among people who financed their educations makes sense.

Think about it: Student A and Student B attend the same university to get the same degree — let’s say it’s geology — and they both graduate with job offers at a starting salary of $46,100 (the median according to PayScale). Student A has no student debt, and Student B has $29,400 in loans, the average debt load of the class of 2012, according to the Project on Student Debt. Student B will have a monthly loan payment of roughly $300.

When it comes time to buy a car, that $300 will probably make a huge difference between the amount of money Student A and Student B can put down on the vehicle. Student A is more likely to be able to pay cash. Same goes for a mortgage: The less disposable income you have, the more you need to borrow.

Should You Finance Your Dreams?

This part of the report is also pretty sad: College graduates who financed their education are less likely to be satisfied with their personal finances and less likely to see an immediate payoff for the investment of their education.

That’s not to say getting a bachelor’s degree isn’t worth it if you have to take out loans. Far from it: College-educated student debtors had a median income of $57,941, while those without bachelor’s degrees made much less at $32,528. The takeaway from this report is the impact student loans can have on your future finances (and your credit), which can sometimes be hard to grasp as a high school student chasing college dreams.

If you don’t come from a wealthy family, you can still go to college without taking on excessive debt, but it requires a lot of planning. Saving for many years is extremely helpful, but students should also apply for scholarships and consider schools that fit their education and financial goals.

For those already dealing with student debt, one of the best things you can do is maintain a strong credit standing: Make your loan payments on time, and keep your credit card balances low, too. With a Credit.com account, you can get two credit scores for free and see how those behaviors impact your scores, and the better your scores are, the more affordable future loans and financial necessities (like insurance) will be.

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