Who among student loan borrows are most concerned about repaying the debt
More than half of people with student loans are concerned about being able to repay them, according to a new Urban Institute report,
Student loan balances in the United States total roughly $1 trillion as individuals pursue the opportunity for higher earnings and a broader range of job prospects that studies show comes with a college degree. Over the past two-and-a-half decades, both the percentage of students taking out loans and the average amount borrowed has increased “substantially,” according to a recent congressional report.
Twenty percent of U.S. adults ages 20 and older have student loan debt, the Urban Institute report finds. They are a varied group: “Young and old, white and nonwhite, men and women, low income and high income, college educated and not.”
Ballooning student loan debt has contributed to lower wealth accumulation for Millennials and Gen Xers, who may find themselves forced to delay saving for home ownership, starting a family, saving for retirement, or building a rainy day fund, the report notes.
But the likelihood of having student loan debt does differ significantly across the subgroups. Only 9 percent of people with no more than a high school degree have student loan debt (which could have been incurred by pursuing a nondegree training certificate or by funding a child’s education), compared with 25 percent for people with some college education but no degree.
Concern about the ability to repay student loan debt is “pervasive,” the report finds across such factors as educational attainment, income, age, and race/ethnicity. But, not surprisingly, some groups are more worried than others about paying down their student loan debt. For example, in households with incomes about $100,000, more than one-third (36 percent) are concerned about their ability to repay. The percentage is twice that among those with household incomes less than $25,000.
Likewise, those with a high school education or some college are substantially more likely to be worried about repaying student loan debt than those with a college or postgraduate degree, just as those with at least one child are more concerned about repaying their student loan debt than those with no children. Those with full-time jobs, too, are less concerned (48 percent) than those who are either employed part-time (71 percent), or who are self-employed (64 percent) or who do not currently have a job (63 percent).
Sen. Sherrod Brown (D-Ohio) has unveiled a new proposal that would allow student loan borrowers to refinance into less expensive loans. Unless Congress takes action before July 1, student loan interest rates will double.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.