The Relationships between Student Debt and Motivation, Happiness, and Academic Achievement

By Zhang, Judy; Kemp, Simon | New Zealand Journal of Psychology, July 2009 | Go to article overview
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The Relationships between Student Debt and Motivation, Happiness, and Academic Achievement

Zhang, Judy, Kemp, Simon, New Zealand Journal of Psychology

The study examines the effects of student debt on the outcomes for individual students. Three hundred and twenty-eight students at the University of Canterbury completed questionnaires asking for information about their debt levels, happiness, attitude to debt and motivation. Their academic records were also obtained. As in previous studies, students with more debt exhibited greater tolerance for it. However, student debt did not have strong associations with individual's motivation. Nor was there any evidence that higher debt levels were related to levels of personal happiness or academic achievement. Overall, the results indicate debt to have little to no impact on the outcome attributes examined in the present study.


Over the last twenty years or so, debts incurred by tertiary students have become a prominent feature of New Zealand society. Student loans are now the largest non-housing debt category for New Zealand households (Thorp & Ung, 2001). Established by the government in 1992, the Student Loan Scheme has become the most important source of borrowed finance for tertiary students. With a balance of $8.4 billion in 2007, 23 percent of the population over the age of 15 have held or are currently holding a student loan (Ministry of Education, 2008). Due to the increasing presence of student debt, the present study focuses on the outcomes of student borrowing.

The increase in student debt, both in New Zealand and overseas (Barr & Crawford, 2005L has led to increasing debate about its desirability. While governments have defended student loans by pointing to the increased participation in tertiary education (Ministry of Education, Inland Revenue, & Ministry of Social Development, 2002, 2006), critics have suggested a number of undesirable consequences. For example, it has been suggested that student debt causes New Zealand graduates to emigrate to facilitate faster debt repayment or to avoid repayment entirely (Brown & Matthews, 2003). In the United Kingdom, it has been suggested that the accumulation of student debt may encourage students both to become more tolerant of debt in the future (Davies & Lea, 1995) and to be more spendthrift when studying (Morgan, Roberts, & Powdrill, 2001).

The relationship between student debt and tolerance of debt has been perhaps the most frequently studied. Davies and Lea (1995) developed a scale to measure attitudes to debt and found that students with higher debt levels were more tolerant of debt. Clearly, such a relationship could be explained either by the more tolerant students borrowing more or by the students who borrow more developing a greater tolerance for debt. However, Davies and Lea found that, in tact, increases in debt level preceded greater tolerance, a finding that has since been replicated both in the United Kingdom and in New Zealand (Boddington & Kemp, 1999; Lea. Webley & Bellamy, 2001), strongly suggesting that the acquisition of debt brings about increased tolerance rather than vice versa. This suggestion is reinforced by the consideration that the phenomenon of student debt in both countries has not arisen spontaneously but as the result of governmental and societal action. Moreover, in Italy, which has taken a different path to financing tertiary education and where student debt is infrequent, students did not exhibit debt tolerance (Vicenzi, Lea & Rumiati, 2001).

The present paper focuses on the relationship of student debt with three other variables: happiness or subjective well-being; academic performance; and motivation to study. These three variables were chosen for two reasons. Firstly, they are important outcome variables that contribute to an individual's tertiary experience. Secondly, previous work suggested a reasonable possibility that each might be affected by the acquisition of debt (e.g., Davies & Lea, 1995; Stradling, 2001; Scott, 2006).

Happiness, or subjective well-being, is a systemically important psychological variable that has frequently been the subject of psychological interest (e.

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The Relationships between Student Debt and Motivation, Happiness, and Academic Achievement


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