Financial stress among college students: New data about student loan debt, lack of emergency savings, social and personal resources
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Connects with: @drentea2015 @dunn2016 @heckman2014
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danahy2024 - p. 693
The Consumer Financial Protection Bureau (CFPB) defines financial stress as a negative emotional response people experience when their financial situation exposes them to uncertainty and (severely) constrains their current and future choices (CFPB, 2015).
danahy2024 - p. 693
To inform our empirical models, we draw insights from the stress process model (Pearlin, 1989) as extended by Drentea and Reynolds (2015). Because the framework proposes more nuanced pathways that link financial stress to money-related stressors, our empirical models allow us to test assumptions about new potential correlates. Finally, we specify models that allow for the possibility that social and personal resources moderate the association between financial stress and money-related stressors.
danahy2024 - p. 694
Our data are from the February 2020 administration of the Study on Collegiate Financial Wellness.1 The study sampled 236,112 college students at the 60 two-and four-year US higher education institutions; 29,883 students agreed to participate in this cross-sectional study design (SCFW, 2020). The overall response rate at participating institutions was 12.7%; 7% at 2-year institutions (n = 9), 13% at 4-year public institutions (n = 38), and 17% at 4-year private institutions (n = 13).
danahy2024 - p. 694
The dependent variable is a composite index of opinions about four statements about personal finances (example: “I feel stressed about my personal finances in general”; alpha = 0.832). For each statement, respondents pick one of four responses that most closely reflect how they feel. Response options range from 1 = strongly disagree to 4 = strongly agree. The summed measure ranges from 4 to 16. Higher values represent greater financial stress.
danahy2024 - p. 695
Because our dependent variable is an ordered categorical variable, our main model specifies an ordered probit.