One in Five U.S. Households Now Has Student Debt
Sep 26th, 2012 @ 7:30 PM by Amber Nelson
A record number of Americans have student debt today, with almost one in five U.S. households still owing money on student loans, according to data from a recent survey from the Pew Research Center.
There are now 22.4 million households, or 19 percent of the country, with student debt. That’s up 15 percent from 2007, right before the financial crisis hit. It is also up by more than double compared with numbers from a survey in 1989. The Pew center also found that a historically-high 40 percent of all households headed by someone younger than 35 had student debt.
The jump in student loan debt is a product of increasing tuition rates as well as an increase in college enrollment. Since the recession started, more and more Americans have gone back to school in hopes of learning skills and earning degrees that will help them find better jobs. Unfortunately, many recent graduates are still finding it difficult to find work in the current economic climate, even as those student loans continue to mount.
And in fact, it is those who have not yet found jobs or who have part-time or low-paying jobs that are feeling this increase in student debt the most. Among households with an income of $21,000 or less, student loan debt made up 24 percent of their income.
“Comparing the debt to their economic resources, the lowest-income fifth of households are the ones experiencing the greatest stresses,” said Richard Fry, a senior economist at Pew in a Washington Post article.
The rich are, however, also taking on more student debt. For those with incomes roughly between $98,000 and $147,00, their student debt load rose to $31,989, up from $25,921 in 2007. And for those making more than $147,000, debt costs increased to $44,810 from $36,033.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.