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Student Loans, Indebtedness and Financial Literacy in the United States

CESR researchers examine changes in Americans’ financial capability since 2009. They find persistent concerns regarding indebtedness and financial literacy, but improvements in precautionary savings.

New data from the third wave of the National Financial Capability Study reveal persistent weaknesses in the financial capability of Americans. Annamaria Lusardi, Academic Director of the Global Financial Literacy Excellence Center at George Washington University, and visiting Senior Economist at the Center for Economic and Social Research at USC, has recently posted an article on the OECD Insights blog examining changes in America’s financial capability since 2009 and presenting some key findings. The data shows that problems with indebtedness and financial literacy continue, with some improvements in the amount of Americans’ precautionary savings.

We highlight some trends outlined in the article below. To read the full post, click here.

Americans’ personal finances have improved since 2009. 


In 2015 almost half (46%) have some precautionary savings, up from 35% in 2009.

We have a lot of student loans but fail to understand the terms of these loans. About one in five respondents do not know the terms of their loans, such as whether monthly payments are determined by income. And 54% did not calculate the monthly payments when obtaining their most recent loans.

These trends have a long-term effect on debt repayment, with 45% of those aged 18-34 and over 25% of those 35-54 having educational loans, but fearing ability to pay them off.


Over-indebtedness is pervasive across all levels of education, income and age.



In spite of improvements in the economy since 2012, the proportion of respondents that agree or strongly agree that they carry too much debt has changed little since then. Interestingly, people feel burdened by debt across all levels of education, income and age.

Financial knowledge does not seem to be improving in the population since 2009.

Results of the financial literacy questionnaire showed that answers remained the same between 2009 and 2015.


Citation for Images and Quote:

Lin, J. T., Lusardi, A., Mottola, G., Kieffer, C., & Walsh, G. (2016, July). Financial Capability in the United States 2016 (Rep.). Retrieved November 23, 2016, from http://gflec.org/wp-content/uploads/2016/07/NFCS_2015_Report_Natl_Findings.pdf

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