In just five years, the country’s student loan burden has gone from bad to worse. Last year, outstanding student loan debt surpassed $1 trillion, and according to a new report out today from the Pew Research Center, record one in five households now owe student loan debt, up from 15 percent in 2007, and more than double the share two decades earlier.
The records don't stop there. Forty percent of all households headed by someone younger than 35 owe such debt, the highest share among any age group, up from about 35 percent in 2007.
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Over the last five years, the incidence of student debt has increased in nearly every demographic and economic category, as has the size of that debt. The average student loan balance increased from $23,349 in 2007 to $26,682 in 2010.
Although most households had less than $50,000 in outstanding student debt in 2010, the share of households with more than that has increased. In 2007, 10 percent of student debt holders owed more than $54,238. By 2010, 10 percent owed more than $61,894.
While every income group had more total student loan debt in 2010 than in 2007, the increases were greatest at the two extremes of the income distribution.
The least affluent fifth of households owed 13 percent of the outstanding student debt, up from 11 percent in 2007. The share of outstanding student debt owed by the richest fifth of households rose from 28 percent in 2007 to 31 percent in 2010.
Those at the upper end of the income scale are more likely than others to owe student loan debt, but they are also likely to be able to meet their obligations. The burden hits hardest for those with lower income. The outstanding debt in 2010 was 2.2 percent of the total value of the assets owned by the poorest households and only 0.2 percent of the richest.
“As student debt rises, there are growing concerns about households' abilities to pay that debt,” says Richard Fry, senior economist for Pew Center Research. “The repayment problems will most likely occur among lower income households.”