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College graduates are generally considered better off than those without degrees, but there’s a considerable gap in well-being between graduates without debt and graduates who borrowed more than $50,000 to finance their undergraduate education. Based on new research from Gallup, Purdue University and the Lumina Foundation, student loan debtors aren’t in great shape.

How Debt Affects Well-Being

In its first year, the Gallup-Purdue index surveyed adults who graduated between 1990 and 2014, asking them about five aspects of their lives, in order to determine levels of well-being. Those categories are defined as such:

  • 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

Based on their responses, graduates are classified as thriving, struggling or suffering, and in all areas of well-being, recent graduates (2000 to 2014) with more than $50,000 of undergraduate debt are thriving much less often than their debt-free classmates. (Among older graduates, classified as 1990 to 1999, debtors lagged in their sense of purpose, financial and physical well-being, but social and community well-being was about the same among debt-free and debt-laden graduates.) The data is based on the responses of 29,560 U.S. adults with Internet access and at least a bachelor’s degree. The survey was conducted from Feb. 4 to March 7, and includes respondents from all 50 states and D.C., with a margin of error of plus or minus 1.4 percentage points.

Higher Debt = Less Health & Wealth

The largest discrepancies came in financial and physical well-being. Only 22% of recent graduates with more than $50,000 in loans say they are thriving financially, compared with 38% of those without debt. As far as physical well-being, again, only 22% of those with a lot of debt are thriving, while 33% of debt-free graduates are. Among older graduates, the so-called thriving gap was 13 percentage points in financial well-being and 8 percentage points in physical well-being. It’s important to note that these numbers don’t show a causal relationship — student debt is not necessarily the reason indebted grads don’t feel like they’re thriving financially, but there is a correlation between the two findings.

These figures may not be encouraging, but they’re also not surprising: Graduates with significant debt loads dedicate a large chunk of their monthly income to loan payments, and depending on their repayment plan and interest rates, they could be stuck with high loan payments for a long time. With hundreds of dollars going toward loans every month, these consumers may struggle or not be able to reach other financial goals, like buying a home, saving adequately for retirement, setting aside money for their kids’ college funds, or making other large purchases.

Debtors may also have to work additional jobs to in order to meet their debt obligations and and maintain their other finances, which could reduce the time they can dedicate to an active, healthy lifestyle. (Again, it should be noted that student debt and lower physical well-being scores are only correlated.)

Student loan debt has a significant impact on your credit health, as well: If you miss payments, your credit scores could drop significantly, which may hurt your chances of qualifying for other credit products and low interest rates. Falling behind on student loan debt is particularly troublesome for your finances, because unlike other forms of consumer credit, student loans are rarely discharged in bankruptcy. There are several strategies you can employ to make paying student loan debt easier, and whenever you’re working on paying down debt — education or otherwise — you should regularly check to see how those loans are affecting your credit standing. If you want to know how your student loans are impacting your credit and ability to potentially qualify for the best interest rates, you can look at two of your credit scores each month on Credit.com.

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