May 14, 2014

5 key findings about student debt

Student debt is the only kind of household debt that continued to rise through the Great Recession, eclipsing credit card debt to become the second largest type of debt owed by American households, after mortgages. According to a new Pew Research report, a record 37% of young households had outstanding student loans in 2010, up from 22% in 2001 and 16% in 1989. The median student debt owed by these young households was $13,000. Here are 5 key findings about young households with student debt.

1 student debt income net worthCollege-educated households with student loans to repay have a lower net worth than those with no student debt. Young college-educated households with no student debt have the highest net worth by far. They have about seven times the net worth of households with student debt. Non-college educated households with outstanding student debt are in the worst position in terms of wealth accumulation. They lag behind their fellow student debtors who graduated from college, and they also trail young adults without a college degree who are free of student debt.

2 While taking on debt to finance a college education is associated with lower net worth, it doesn’t seem to have an impact on income. In college-educated households, the median income is roughly the same, regardless of whether the household head has outstanding student debt. And it is nearly twice the income of households whose head does not have a bachelor’s degree.

3 Young households with student debt are much more likely to have car loans and credit card debt, too. And their typical total indebtedness (including mortgage debt, vehicle debt, credit cards, as well as student debt) is almost twice the overall debt load of similar households with no student debt.

student debt car loan credit card debt

4 Debts are growing for households that have student loans to repay. 

student debtor debt to income ratios

Debt-to-income ratios have increased for young student debtors, even as they have declined for other young households since 2008. The typical young, college-educated student debtor household has debts equivalent to two years of income. Young, college-educated households with no student debt and less-educated households with student debt carry half this debt load, or the equivalent of one year of income.


5 student debt financial satisfactionYoung households that borrowed for college are less satisfied with their personal financial situation than those who didn’t and are less likely to say their education has paid off.


Topics: Economics and Personal Finances, College, Student Loans

  1. Photo of Richard Fry

    is a senior researcher focusing on economics and education at Pew Research Center.

  2. Photo of Andrea Caumont

    is the social media editor at Pew Research Center.


  1. Justin3 years ago

    Stop requiring a degree for EVERYTHING!! This would solve a lot of issues. And people spend years taking classes and studying information that is irrelevant to their work of choice. Most degrees could be treated as a if they were a trade where you only learn the necessary skills to complete the program. History and literature have nothing to do with engineering, but I guarantee that every engineer had to take literature and history as part of their degree program.

  2. STEVE GIBSON3 years ago

    Having achived 3 degrees without debt I am sad to see how todays graduates have been sold the need to pile on the debt and spend years paying it back. The advice I gave my daughter, Start with Community College and be realistic , she did and ultimatly graduated owing…”O” We oversell the name schools for everyone, when in reality for the vast majority of folks State University will work just fine. The Western Govenors University is a non-profit program for online degrees that is at a price point that can also be done with no to low debt.

  3. Tom3 years ago

    I question the implied causality between the amount of student debt and the resulting financial problems. An alternate explaination is that the same individuals who incur large amounts of student debt continue that behavior after graduation thus digging themselves into a deeper financial hole. Ergo, the problem is not the amount of debt, but the lack of understanding of, or regard for, the payback implications of incurring debt which continues on in the individuals’ post graduate behavior.

    1. Richard Fry3 years ago

      You raise an important point. No causality was implied. Households owing student debt are more likely to have other debts, but you are correct that student debt may not be causing the additional debts or the lower assets. The fifth paragraph of the full report hopefully correctly conveys that this research does not demonstrate causality. It is necessary however to assess student debt, or any other debt, in the context of the household’s full financial circumstances. The findings are of value in understanding the economic gains and consequences associated with student debt for young households.

    2. STEVE GIBSON3 years ago

      excelent point

  4. Joe3 years ago

    Part of the problem with the student loan issue is that many applicants are using the money to live on rather than for education. They have no jobs or have been out of work and find the student loan program easy money to live on. Further, education organizations appear to depend on the program for their cash flow. It seems that somehow stricter controls need to be placed on the program.

  5. Ben3 years ago

    Post student debt is directly impacted by whether or not the same student took economic related classes. Was this addressed in this research questionnaire ? Just curious. Ben.

    1. Richard Fry3 years ago

      No, that information is not available in this data set.

  6. Richard Fry3 years ago

    No, that level of detail is not feasible in the Federal Reserve data that was used.

  7. Peter3 years ago

    Did your study break out findings for medical school students?

    1. hjones3 years ago

      It would be interesting to see this broken down by types of degrees (liberal arts etc.) My guess is that their will be a big discrepancy between those with English degrees and those that went on to become doctors, lawyers, engineers, etc.

      1. Richard Fry3 years ago

        Some of what you seek is available. For example, student debt amounts for newly minted degree holders by type of degree is available. The typical newly minted bachelor’s degree holder who borrowed accumulated about $26,500 in 2012. By comparison, newly minted degree holders obtaining advanced degrees accumulated more student debt. If they borrowed, the total amount accumulated was about $58,000 (that figure includes both their undergrad borrowing as well as what they borrowed for graduate school). Additional detail by the advanced degree and field of study can be found in the New America Foundation report:…

        Net worth figures might be available for those with bachelor’s degrees versus advanced degrees, but that is about as detailed as they get.

        Household income figures could be available by degree and major field of study, but I can not point you to a ready source.

        But there are lots studies of worker earnings by major field of study. Pew has published some. Many other researchers have published them. For a recent example I will point you to a Census Bureau report:…