July 1, 2013

Households owing student loan debts at record levels

19%

About one out of five of the nation’s households owed student debt in 2010, more than double the share two decades earlier.

The rates for government-backed student loans — known as Stafford loans — are set to double today after lawmakers on Capitol Hill failed to reach a compromise for heading off the increase. An estimated 7.4 million university students will be affected and the added cost for the average borrower will be $2,600 over 10 years, according to the congressional Joint Economic Committee.

The weight of debt from college loans has already made a substantial impact on U.S. households. A Pew Research Center analysis of government data that became available last year found that 19% of the nation’s households owed student debt in 2010, more than double the share two decades earlier, and a significant rise from the 15% that owed such debt in 2007, just prior to the onset of the Great Recession.

A record 40% of all households headed by someone younger than age 35 owed such debt, by far the highest share among any age group, the analysis also found.

As of 2010, the average outstanding student loan balance increased to $26,682 in 2010 from $23,349 in 2007 among households owing student debt. Most debtor households had less than $50,000 in outstanding student debt in 2010, but the share of households owing elevated amounts has increased. In 2007, 10% of student debtors owed more than $54,238. By 2010, 10% of student debtor households owed more than $61,894 (all dollar figures adjusted for inflation and in 2011 dollars). Read more

Category: Daily Number

Topics: Student Loans

  1. Photo of Bruce Drake

    is a Senior Editor at the Pew Research Center.

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1 Comment

  1. Mike Montague11 months ago

    I don’t doubt your figures, but underlying information must be examined too.
    First and foremost, we are coming out of the worst recession in 75 years. during a recession, employment is down and debt is up. No surprise.
    Heavy promotion of getting a college education has been going on for many years. Families and individuals who are trying to raise their standard of living will incur more debt than families for whom a college education is a family norm.
    More Americans are pursuing higher education and taking out loans to do so. Higher education is, on the average, a solid investment. The median earnings for young adults with bachelors degrees is about 50% higher than those with high school diplomas. Can Pew tell us what are the numbers of people going to college by year?
    Also, I think it is important to see inflation adjusted comparisons by year going back to the last oil shock of the late 1970′s. The rise in household college debt from
    $23,349 in 2007 to $26,682 in 2010 is a 14% increase. 5% is due to inflation and 9% of the increase can be attributed to a massive collapse in the stock, real estate, and credit markets. This will adjust downward as the economy normalizes.

    As a comparison, the Ford Mustang, Standard Coupe MSRP in 1979=$4,494 ; in 2012=$23,105. The median price of a newly constructed home in Jan, 1979 was $60,300; in Oct. 2011= $212,300 (Inflation is all around us, like vermin in our pantry. Printing money and giving it away ads to inflation and should only be done with extreme caution.) Based on these inflation adjusted comparisons, I am not overly concerned by the debt load on families. However, society should help young people, who have little or no credit, to make a personal investment in their education. This can be in the form of credit guarantees which should qualify them for better rates.

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