Understanding the Impact of Debt Aversion on Student Borrowing Behaviour in Times of Crisis: The COVID-19 Pandemic and its Indirect and Direct Effects on Students in Dutch Higher Education

The COVID-19 pandemic has caused both academic and financial hardship for students pursuing higher education in the Netherlands, including study delays and layoffs. Given that these types of incidents have a bearing on students' overall financial behaviour and that student loans are a common tool among students to finance their postsecondary education, one would expect these effects of the pandemic to have a direct impact on student borrowing behaviour. However, there is another variable to take into account, namely students' financial preferences, particularly with regard to having or taking on debt. Accordingly, this study reports on the degree of debt aversion and how it affects the borrowing behaviour of students in Dutch higher education during this crisis. This relationship is examined by means of three hypotheses and corresponding multiple regression analyses with moderation effects, using data obtained through the use of a survey and an additive index measuring the degree of...Show moreThe COVID-19 pandemic has caused both academic and financial hardship for students pursuing higher education in the Netherlands, including study delays and layoffs. Given that these types of incidents have a bearing on students' overall financial behaviour and that student loans are a common tool among students to finance their postsecondary education, one would expect these effects of the pandemic to have a direct impact on student borrowing behaviour. However, there is another variable to take into account, namely students' financial preferences, particularly with regard to having or taking on debt. Accordingly, this study reports on the degree of debt aversion and how it affects the borrowing behaviour of students in Dutch higher education during this crisis. This relationship is examined by means of three hypotheses and corresponding multiple regression analyses with moderation effects, using data obtained through the use of a survey and an additive index measuring the degree of debt aversion. This research has shown that the financial preference of debt aversion has a negative impact on the borrowing behaviour of students. In other words, the higher a student’s degree of debt aversion is, the lower their monthly amount of student loans will be. This relationship does not differ depending on whether or not a student has been directly affected by the pandemic and the effects thereof.Show less

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Understanding the Impact of Debt Aversion on Student Borrowing Behaviour in Times of Crisis: The COVID-19 Pandemic and its Indirect and Direct Effects on Students in Dutch Higher Education