Study Loans, Stress, and Mental Health Problems

Abstract
We investigate whether the introduction of a student loan system in Dutch higher education influences stress and mental health problems among higher education students. The 2015 policy reform turned universal grants for students in higher education into loans under favorable conditions. Students voiced concerns that the reform contributes to feelings of stress, burn-out, and depression. We empirically examine this concern using three outcome measures: 1) general practitioners’ (GP) diagnosis of psychological problems; 2) GP diagnoses of mild symptoms indicating elevated stress levels; 3) antidepressant drugs dispensed by pharmacies. We compare health outcomes before and after the reform between students in higher education and students in secondary vocational education, who are not affected by the reform. Moreover, for university students, we compare students whose parents live on a remote location with those who live more central. As students from a remote location are more likely to move out and live independently, they are more affected by the abolition of the basic grant, which was much higher for students living on their own. Taken together, we find no evidence that the reform increased mental health problems or increased mild complaints that can plausibly be related to elevated stress levels. Joint paper with Zhiling Wang, and Bas Karreman.