Student debt has increased in nearly every demographic and economic category: Report
Student debt has increased in the past five years in nearly every demographic and economic category, as has the size of that debt, according to a Pew Research Center study.
Nineteen percent of the nation’s households owed student debt in 2010, more than double the share two decades earlier and an increase from the 15 percent that owed student debt in 2007, Pew found. Forty percent of all households headed by someone younger than 35 owe student debt, the largest share among any group.
“Whether computed as a share of household income or assets, the relative burden of student loan debt is greatest for households in the bottom fifth of the income stratum, even though members of such households are less likely than those in other groups to attend college in the first place,” the report states.
U.S. student loan debt now tops $1 trillion. The Pew report analyses newly available government data to chart how that burden increased from $23,349 in 2007 to $26,682 in 2010. The share of households owing elevated amounts of student debt (more than $50,000) has increased. In 2007, 10 percent of student debtors owed more than $54,238. Three years later, the same percentage owed more than $61,894.
The increases were greatest in households in the least affluent fifth of households and the most affluent fifth rather than in the middle three-fifths.
College costs rank as the single most significant source of personal debt among investors participating in a Millionaire Corner survey conducted in April. Forty-four percent of investors ages 40 and younger identified education expenses as a source of debt, as did 28 percent of investors ages 41 through 59.
College costs have been outpacing general inflation – rising an average of 5.6 percent faster – for the past 10 years, according to The College Board.
Outstanding student debt has risen as a share of household income for all income groups considered in Pew’s study. While it doubled for the richest fifth of households from 2007-2010, it was “markedly higher” for the lowest fifth of households by income.
Similarly, the outstanding student debt in 2010 was 2.2 percent of the total value of the assets owned by the lowest fifth of households by income, but only 1.1 percent of the assets owned by the richest ninth decile of households and a mere 0.2 percent of the assets owned by the richest tenth of households, Pew reports.
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.