Course credit wise, financially foolish

Here is an interesting study, Highly Educated Have Biggest Debt Problems by Dan Kadlec.

Overall, the percentage of Americans who were paying more than 40 percent of their income for debts like mortgages and credit card bills increased from about 17 percent in 1992 to 27 percent in 2008.

But college-educated people were more likely than those with high school or less education to be above this 40 percent threshold - considered to be a risky amount of debt for most households.

The association between more education and higher debt was true even after taking into account the fact that people with more education tend to have higher incomes.

In addition, people who reported being more optimistic about the future of the economy for the next five years were more likely to have a heavy debt burden, the study found.

The alternative, and equally valid headline might be, "The more educated you are, the more likely you are to make bad financial decisions". Ouch! Perhaps we ought to pepurpose the old "penny wise, pound foolish" into something clunkier but more contemporary: "course credit wise, financially foolish".

It would be interesting to know whether there is more to this statistical relationship. By education level, is there a straight line relationship between education attainment and debt burden? If there were, it would go a long ways to explaining the poor financial condition of most countries in the OECD right now - the people making public financial dicisions are those most likely to be incapable of sound stewardhship (according to this study). Gives you pause for reflection.