By Danny Zeng
In a new report released by the Pew Research Center last Thursday, it has become apparent that student loan debt is now more of a burden to more families than ever. Throughout the 1990s, about one in ten households held educational loan debt. Today, that number has doubled to almost one fifth of households. According to the study, increasing student loan debt hurts the lowest income quintile of households the most. In 2007, as a share of the total household income, student loan debt was 15% for the lowest quintile. By 2010, that percentage had gone up to 24%, partly as result of decreasing income. This creates real financial challenges for low-income families, as student loan debt increasingly takes away greater proportion of their wealth. These households will probably have to repay their student loan debt sacrificing living expenses.
Some highlights from the report:
- Average student loan debt in 2010 was $26,682. About 10% of indebted households have outstanding debt in excess of $62,000, well beyond the median income in this country.
- For students attending a four-year public university, the average debt was $22,000
- Almost half (44%) of the outstanding debt were owned by young people under the age of 35
- Middle and upper-middle households suffered the most in the student loan crisis, with these groups owning 45% of all debt in 2010. For comparison, the poorest two-fifths owned 24%. The middle-fifth proportion had gone up by three percentage points from 2007 to 2010, from 20% to 23%.