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Among U.S. Households, 1 in 5 Has Student Loan Debt
As college tuition continues to climb and graduating seniors continue struggling to find jobs, a new study by the Pew Research Center confirms what many already know — student loan debt continues to increase. Nearly 1 in 5 households in the United States currently have student loan debt, a figure that has doubled in the past two decades and is up 15 percent since 2007.
Loan debt is hitting low-income households and young people the hardest. The fifth of the population with the lowest household incomes have the highest student loan debt burden, representing 24 percent of their household income and up 9 percentage points since 2007. In contrast, for those in the top fifth income bracket, student debt is only 7 percent of their household income. Additionally, 40 percent of households headed by someone under 35 have student loan debt. A Young Invincibles report suggests these high debt levels are preventing young people from entering the housing market, which could be stalling the economy’s recovery.
So why are households carrying such large amounts of school-related debt? As we’ve reported before, college tuition and fees have increased an inexplicable 583 percent since the early 1980s. That increase is more than three times that of the median family income, and about four and a half times as fast as inflation for the same period. No wonder the national average of student loan debt has grown by over $3,000, to $26,682, since 2007. And young graduates are struggling more than others to find jobs. In 2011, more than 53 percent of college graduates under 25 were unemployed or underemployed, the highest rate in 11 years. Meanwhile Pell Grants currently cover the lowest proportion of college costs ever.
The unrestrained growth of college costs is burdening successive generations with larger and larger amounts of debt while higher education institutions and the federal and state governments provide less and less financial-aid support to our neediest students.
It is time to get serious about investing in the country’s future. It is time that all levels of government and institutions focus on ways to make college affordable for all students, not just those with the greatest ability to pay.
— Nicole Tortoriello