School of Social Work Research Report - August 2023

Poverty

Dr. Min Zhan’s research centers on identifying social policies and other factors associated with the long-term economic well-being of low-income families with children. Her research examines the impact of educational approaches, specifically in the forms of postsecondary education and financial management training, on the long-term economic well-being of low-income families. Informed by the proposition of indebtedness and framework of racial inequalities, Dr. Zhan recently analyzed data from the 2018 National Financial Capability Study to investigate associations between student loan debt and financial stress and hardship among young adults. The sample for her study included 4,535 respondents between the ages of 24 and 35 years, including 2,766 respondents who were categorized as “white young adults” and 1,769 respondents who were categorized as “minority young adults”. Overall, a large proportion of young adults reported experiencing different types of financial stress and hardship, with minority young adults reporting higher rates of anxiousness related to their financial situations, regardless of whether they had student loan debt.

After controlling for a range of socio-economic characteristics, results from her study suggested that young adults with student loans were more anxious about financial matters and felt their life was more controlled by money, compared to their counterparts without student loans. Additionally, results from Dr. Zhan’s study suggest that these related stresses extend beyond graduation and that young borrowers have more difficulties paying bills and are more likely to have health related hardships than those without student loan debt, especially for young minority adults. Borrowers identifying as women with dependent children, and borrowers without a bachelor’s degree were more likely to experience financial related stress and hardship. Results further suggested that having higher levels of financial literacy and access to emergency savings reduced many of the stressors associated with financial hardship and student loan debt.

These findings inform Dr. Zhan’s recommendations that investments should be made to provide targeted loan relief and cancellation programs, increase need-based student aid, and develop effective initiatives that would increase financial literacy and emergency savings funds for young adults.