Student Loans and Health-related Financial Hardship

Abstract

Research has shown that student loan borrowers in repayment exhibit physical and mental health problems. These can be exacerbated by and contribute to health-related financial hardship. We use the 2015 U.S. National Financial Capability Study to examine the likelihood of having past due medical bills and of avoiding health care services by not purchasing prescribed medication, skipping tests or follow-up with a doctor or not seeking care for a medical problem. Borrowers on income-driven repayment plans and those who made late payments are found to be more likely to have unpaid medical bills and to have avoided required medical attention. In addition, those who completed their funded education program but had made a late payment were more likely to avoid seeking medical attention when needed. Practical implications for loan administrators and those working with students are discussed.