Student loan debt and family formation of youth in Japan

Since the late 1990s, the number of college student loan debtors has increased rapidly in Japan. Despite the uniqueness of Japanese higher education policies in terms of tuition levels and heavy reliance on educational loans rather than grants, few studies have focused on the influence of student loans on adult youths' lives. This study is the first to provide a detailed analysis of the relationship between student loan debt and youth life events. We explored the impact of student loan debt on family formation, using a data set of college graduates collected in 2017. We employed survival analysis methods to understand the relationship between student loan debt and marital decisions, and negative binomial models to analyze the impact of this debt on childbearing. The results showed that 2-year college graduate women with student loan debt were more likely to delay marital decisions than women without student loan debt. Taking out student loans also had a negative correlation to childbearing, which was also stronger for 2-year college graduate women. In conclusion, this study revealed that the Japanese government's reliance on student loans has unexpected consequences. Even following recent reforms, student loan debt continues to be a major financial burden for young Japanese people and is likely to negatively affect family formation in Japan, which has already seen a decline in marriage and fertility rates over the last few decades. Our results call for additional policies to mitigate the negative influence of the Japanese college student aid system.