Nearly one-fifth of all households owed student loan debt in 2010, according to new research by the Pew Research Center. This is more than twice as many households who held student loan debt in 1989, and a 4% increase since 2007.
The youngest households have been hit hardest—40% of households headed by someone 35 or younger owe student debt. It is the highest percentage that age group has ever seen, and the highest percentage out of any other age group.
Low-income households have also taken the bulk of the blow. Relative to income and assets, the portion of student debt the bottom one-fifth of households owe is much greater than those who earn more, despite the fact that the lowest income bracket is less likely to attend college than other groups. The poorest one-fifth of households also held a greater percentage of student loan debt in 2010 than they did in 2007—13% compared to 11%.
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Households in the highest one-fifth of the income ladder also have seen changes since 2007. In 2010, the most affluent fifth of households held 31% of all student debt, compared to 28% in 2007. Between 2007 and 2010, the outstanding student debt-to-income ratio doubled among the richest fifth of households, but the ratio of student debt-to-income was still much higher for the lowest fifth of households.
Household indebtedness has increased for the lowest-earning two-fifths of Americans since 2007 and average student debt has increased nationwide. In 2007, the average outstanding student loan balance was $23,349; in 2010 it was $26,682. That’s more than double the average outstanding debt owed in 1995 of $11,714. From that point, debt increased fairly drastically and rapidly, jumping to $17,942 in 1998 and breaking the $20,000 mark in 2004.
More people also owe more money than ever, when accounting for inflation and based on 2011 dollars: in 2007, 10% of debtors owed more than $54,238; in 2010, 10% of debtors owed more than $61,894.
One bright spot the research found is that average general household indebtedness has declined by more than $4,500, from $105,297 in 2007 to $100,720 in 2010, meaning that while families are paying more in student loan debt, they are making cuts or racking up less debt in other facets of their lives.
Follow Anna Schumann on Twitter at @ASchumannCMN.
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