Debt Takes over Your Mind: A Qualitative Exploration of Women and Debt

Background: Borrowers’ financial lives have become more precarious as real income and wages have declined and debt burdens have increased. Debt from medical expenses, student loans, credit cards, and payday loans have been rising steadily, especially for women borrowers, with dramatic increases since the Great Recession in 2007. The effects of the COVID-19 pandemic recession will likely be far more severe, forcing households to borrow significantly over months and years to meet their expenses.

Borrowers’ rising debt has implications for mental health. A range of mental health effects from anxiety and depression to suicide is associated with debt burdens from ubiquitous access to expensive credit. While debt burdens have been shown to contribute to poor mental health, the potential gendered and racialized effects are not well understood. For example, the debt portfolios of Black, Indigenous, and Women of Color (BIWOC) typically include higher-cost payday and private student loans that have more punishing interest rates and longer repayment plans. In contrast, white women borrowers often have debt from mortgages and low-interest student loans that can be converted into wealth through refundable tax credits and low interest rates. We explore how women’s debt burdens contribute to their mental health.

Methods: Through in-depth interviews with 30 BIWOC ages 18 to 40 conducted between January and March 2021, we explored debt burdens and began establishing a theoretical foundation for research explicating links between debt and mental health. Forty-seven percent of women identified as Black and 33% identified as Native or Indigenous. We conducted thematic coding in Atlas.ti to interpret women’s narratives through a critical race framework with the theoretical concepts of predatory inclusion and intersectionality, recognizing the finance industry’s responsibility for extending credit to borrowers and acknowledging simultaneous sexism and racism by uplifting BIWOC’s experiences.

Findings: Thematic coding revealed women’s patterned narratives that attribute mental health struggles to their debt. They discussed mental health issues including anxiety, panic attacks, and depression, with some women indicating domino effects to their physical health, “I ended up in the [emergency room]. My hemoglobin levels, my red blood cell count, rather, they were really, really low. So I had to get a blood transfusion, two bags of somebody else’s blood, which now are presenting new health issues.” Women described concerted efforts to avoid simultaneous sexist and racist stereotypes, such as being perceived as lazy, undeserving, or financially irresponsible, which could contributed to their worsening mental health. BIWOC’s experiences highlight the potential mediating roles of sexism and racism on mental health.

Concluding Implications: Our findings suggest that BIWOC experience notable mental health struggles from holding debt, with student loan debt in particular emerging as a critical source of stress. These findings align with organizers’ and activists’ considerations of debt as a racial, gender, and economic justice issue. Moreover, BIWOC’s experiences have implications for policies aimed at reducing or eliminating student loan debt, and we discuss possibilities for using narratives to influence social policy.