Preparing For Parenthood: The Impact of Student Loans on Family Planning

If you are expecting, there are numerous steps you can take to prepare physically, financially and emotionally for becoming a parent. Most important of all is becoming familiar with the process and associated costs.

Preparing to become a parent involves accepting relationship changes, parental worries and excitements, evolving responsibilities and unexpected surprises along the way.

Student Loans and the Decision to Have Children

Raising children can be financially draining for even well-off families, even those that can afford their tuition and childcare costs. Not only must parents pay tuition and childcare expenses out of their incomes but must also repay loans with interest; for a family earning $70,000 annually this could add up to an estimated total debt load of $13,000 per child over their childhood (assuming an interest rate of 7 percent). Carrying such significant debt loads may make it impossible for some families to have children.

Future Family found in its survey, 44 percent of women with student loan debt delayed having children, and many millennials don’t consider having any at all due to affordability, according to SmartAsset. On a typical salary of $47,000 for example, around 10% of their income goes toward paying student loan bills which leaves little room for other expenses like car payments, taxes, retirement savings plans and utilities costs.

Does debt play a significant role in our decision to have children? Based on an analysis of data from the National Longitudinal Study of Youth-1997, our research finds that debt has an indirect negative effect on fertility for young women while credit card and home mortgage debt appear to encourage early parenthood as they provide immediate access to consumption goods. As financialization becomes ever more prevalent globally, family scholars need to pay close attention to how debt influences life trajectories.

Student Loans and the Decision to Have More Children

Many women who have taken on student debt have used it as an excuse for postponing having children, leading to an increase in millennials who either do not have any or have very few (an average of only 1.8).

This trend could be explained by the fact that most millennials earn less than $50,000 annually, making it difficult to save enough to support having children. Furthermore, women with student loan debt tend to have jobs with benefits that would allow them to cover childcare and other associated costs of raising children.

Michelle Fernie-Oley, 33 years old wedding planner and business owner living in New York City with her husband, has delayed parenthood until her student debt of nearly $80,000 is paid down. While stress, finances, or the desire to pursue other professional goals may all play a part in postponing it until later on.

While other forms of debt such as consumer and home mortgage loans may accompany fertility, our analysis of longitudinal data from the Panel Study of Income Dynamics indicates that student debt levels are specifically linked with decreased likelihood of becoming parents over time – even after controlling for factors like education level, marital status, age, race background and class background.

Women at higher levels of debt experience the greatest impact from debt. A $1,000 increase in student loan debt was associated with a 1.2% decrease in annual probability of having children, comparable to what was observed among women living in households that are part of the lowest income quartile, suggesting that student debt has the same relationship to fertility as poverty does.

Student Loans and the Decision to Have Less Children

Millennials are having children later than previous generations and with fewer on average. Some attribute this phenomenon to student loan debt; according to a Future Family poll conducted in March by an organization dedicated to understanding female fertility, 44% of female borrowers expressed that they might consider postponing having children due to student loan debt.

student debt may be linked with fertility delays, yet we cannot say it is the direct cause. Instead, delaying may be caused by several factors including an individual’s desire for upward mobility and preference for financial security, especially at higher levels of indebtedness.

Other forms of consumer debt appear to go hand-in-hand with fertility; credit card and home mortgage debt is linked with an increased likelihood of transitioning to parenthood. As we find, a linear term in the spline model is significant in base models and indicates that, among debtors, every $1000 increase in student loan debt leads to a 1.2% decrease in annual risk of transitioning to parenthood. As previously discussed, when other controls are introduced into the model (including education, black and Hispanic status, marriage status and net of hours worked income), student loans remain significantly linked with lower likelihood of transitioning to parenthood, especially at high levels of indebtedness. It appears that this correlation between student loans and fertility, either as deterrents or delays, and women is stronger than between males.

Student Loans and the Decision to Postpone Children

Preparing to become parents is a major life step that should not be undertaken lightly. While exciting and fun, becoming parents requires both physical and emotional preparation. Couples must ensure they are financially and emotionally prepared before embarking on any fertility treatments such as IVF in the future.

Recent research revealed that higher student debt levels were linked with greater odds of postponing children even after accounting for demographic and socioeconomic variables. This finding supports the theory that in an ever-more financializing world, debt can both facilitate and limit key life transitions such as marriage and motherhood.

Millennials are the most indebted generation in history. On average, they carry an outstanding loan balance of $393. This amount of debt makes it challenging for young adults to save enough for a down payment on a home or pay expenses such as childcare, medical bills, rent/mortgage payments, retirement savings plans or other necessities with limited income available to them – sometimes making conceiving less likely than expected.

Many participants in our research reported feeling as though student loans caused them to delay parenting decisions, whether due to career goals or stress associated with carrying high levels of debt; or simply worrying about its financial ramifications.

No matter their motivations for delaying childbearing, many young adults appear to be choosing to postpone childbearing due to financial concerns. As a society, we should pay more attention towards helping these individuals prepare for parenthood than on presuming they will start families without first dealing with their debt load.

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