A recent study by  Lawrence M. Berger of the Institute for Research on Poverty at the University of Wisconsin-Madison finds that a parent’s mortgage and education loans will affect a child’s well-being.

However, the affect could be both  positive or negative.   Children who grow up in a home with debts such as credit card debt, or medical bill debt, tend to suffer from behavior issues.   Just as debt influences parents, it can influence children as well. Depending on the amount, and how it’s handled, results can be positive or negative. Things that are taken into consideration when debt effects children are:

  • What the debt is used for?
  • How much debt has accumulated?
  • What is the price of the debt?
  • What is the debts interest rate?

Children may not be able to understand debt very well, but family debt that affects their every day lives, such as medical and educational debt may have a lasting impact  on them.

“Our findings underscore that debt can be both positive and negative, depending on what it is being used for and the price or cost at which it is borrowed, in terms of interest rates, fees, and the like,” said lead author Lawrence M. Berger of the Institute for Research on Poverty at the University of Wisconsin-Madison.

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