Marc Herman sums up a new study finding that “the more educated you are, the more likely you are to take on irresponsible levels of debt”:
No, they aren’t talking about the student loans you ran up getting that can’t-miss PhD in Etruscan Socio-Linguistics. They’re talking about buying wide screen TVs on your ninth credit card, because that 0% teaser rate was just irresistible. Apparently people with lots of education tend to believe themselves so capable of paying down debt, they rack it up with less consideration. The Ohio study found that people with college degrees were more likely than those with only high school educations to pay more than 40% of their monthly income to debt. Forty percent represents a level of debt, the authors claim, at which job loss or a health crisis would likely result in a debt default. Basically, it’s the point at which you long ago should have stopped borrowing, but didn’t.