Students' Concern about Indebtedness: A Rank Based Social Norms Account

This paper describes a new model of students' concern about indebtedness within a rank-based social norms framework. Study 1 found that students hold highly variable beliefs about how much other students will owe at the end of their degree. Students' concern about their own anticipated debt--and their intention of taking on a part-time job during term time--was best predicted not by the size of the anticipated debt, but by how they, often incorrectly, believed their debt ranked amongst that of others. Study 2 manipulated hypothetical debt amounts experimentally and found that the same anticipated debt was rated as 2.5 times more concerning when it ranked as the second highest being considered than when it was the fifth highest. Study 3 demonstrated that the model applies to evaluation of different types of debt (income contingent loans versus general debt).