Steep rise in US student debt

Nieuws | de redactie
28 september 2012 | Poorest households see a huge increase in student loan debt to household income ratio: 24 cents of every dollar are used for paying of those debts, Pew Research Center finds on the basis of new US government data.

About one out of five (19%) of US households owed student debtin 2010, more than double the share two decades earlier and asignificant rise from the 15% that owed such debt in 2007, justprior to the onset of the Great Recession, Pew Research Centerwrote in a recent report.

Average loan balance goes up

The research also finds that the relative burden of student loandebt is greatest for households in the bottom fifth of the incomespectrum, even though members of such households are less likelythan those in other groups to attend college in the firstplace.

Among households owing student debt, the average outstandingstudent loan balance increased from $23,349 in 2007 to $26,682 in2010. Most debtor households had less than $50,000 in outstandingstudent debt in 2010, but the share of households owing elevatedamounts has increased. In 2007, 10% of student debtors owed morethan $54,238. By 2010, 10% of student debtor households owed morethan $61,894.

Student loan burden % household incomeRising student debt burdens can also be evaluated inlight of the other debts owed by households, such asproperty-related debt, credit card debt and all installment debt.Student debt is a growing share, rising from 3% of outstandingtotal debt owed by households in 2007 to 5% of all debts in 2010,even though average household indebtedness fell from $105,297 in2007 to $100,720 in 2010. For the lowest fifth of householdshowever, average indebtedness by annual income rose from $17,579 in2007 to $26,779 in 2010.


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