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Subscribe to RSSForty percent of U.S. households headed by someone younger than age 35 owed student debt in 2010 – double the percentage from 20 years ago, according to a new Pew Research Center analysis that found a record one in five households hobbled by student debt.
“We know the total amount of student debt has been rising, but what this study does is help us get a handle on who owes it,” said Richard Fry, a researcher with the Pew Center.
Outstanding student loans have topped $1 trillion, and rising tuition costs have spurred colleges and students to call for reforms.
“It’s been a hard labor market for everyone, but particularly for 18- to 20-year-olds, who have not been able to find work or find work in their qualified field,” Fry said.
View the Pew Research Center's complete report (Pdf)
Households headed by someone younger than age 35 have by far the highest share of the debt among the age groups, Fry said. He said 70 percent of the total debt was owed by households headed by those under age 45.
Among households owing student debt, the average outstanding student loan balance edged upward to $26,682 in 2010 from $23,349 in 2007, data show.
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Fry said incidence of student debt increased in nearly every demographic and economic category since 2007, but households with incomes less than $21,000 were hardest hit.
“While households with higher incomes also had student debt, they were able to shed other debt obligations,” he said.
Other key findings:
- In 2010, nearly 90 percent of the debt was owed by households whose head had completed at least some college education and almost 70 percent was owed by households whose head had finished college.
- In 2009-10, 51 percent of full-time, first-time undergraduate students had a student loan; that was up 43.5 percent in 2006-2007.
- Most debtor households had less than $50,000 in outstanding student debt in 2010, but the share of households owing elevated amounts increased. For example, in 2007, 10 percent of student debtors owed more than $54,238. By 2010, 10 percent of student debtor households owed more than $61,894 (figures are adjusted for inflation).
The study released is based on the Survey of Consumer Finances, conducted every three years and sponsored by the Federal Reserve.
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Fannie/Freddie/FHA has caused home prices to skyrocket just as Federal student loan program has caused tuition to skyrocket. More Americans are forced to work harder and longer to pay for an over-priced home because of government intervention. Essentially, the Federal government has enslaved people who need a roof over their head or family. Likewise, Federal student loan program has enslaved students who must obtain a education loan due to over-priced college education.
How long these two scams can go on is anyone's guess. But there will be a breaking point in the future.
It's not just the Federal loan program that is causing the problem, it's the Universities themselves. I live in a town that has an expensive, private University which REQUIRES students to live on campus at a very healthy rate. Next, the student must purchase a meal plan. Not an option, a must. Now they do have options -being able to eat everything, anytime to eating one meal a day during off hours which means very limited choices. Now, we have unlimited Financial Aid which means that you buy can every textbook necessary, sweatshirt, teddy bear, key ring and pennant along with your Coke and chips. Yes, Coke and chips can go on your Financial Aid. You have classes that are only offered every two years and the competition can be rough, along with a list of prerequisites that can take 1-2- years to full fill before taking a necessary class to graduate. It's ridiculous and a scam to take as much money as possible. I went to college in the 70's. I lived at home and I worked. I never had to take a loan out and now I see kids leaving with 100K in student loans that will take a lifetime to pay off.
We over pay the professors an obscene amount.
50 years ago tuition was cheap at public colleges and GI Bill paid for all the vets education costs....Eiesenhower was a SOCIALIST!!!!!!!!!!
Reforms definitely need to be made. Education shouldn't have to be a luxury. If students are being pulled down by these debts, how can they ever be truly successful and on their feet in the real world?
Oh well, no big deal. After Obama wins I'm sure he will just have the tax payers pick up the tab for students who over extended themselves. It's not their fault, they were probably duped by the unscrupulous bankers and school officials. Besides no one told them that a liberal arts degree won't get you a decent job these days. What's another trillion dollars on top of the 16 trillion we already owe. Obama said he's not concerned about our national debt going into the next four years so why should conservatives worry about it. Gees, life is so much simpler when you think like a liberal!
Look at the numbers of ungraduated students in the top 25 public institutes of higher education, then see what percentage received Pell grants. What percentage of those that do not graduate pay back loans or utilize grants. Making education available for all sounds like a great thing, but few can do that level of education. That money is wasted. It would be better spent on having kids prepared for college or a trade school. Why has not Obama started education reform. If you are not saving for education you get penalized by the additional IRS agents needed to be hired. We won't worry about the wasted money in education.
Its about time parents and students alike rebel against these darn expensive schools. The only reason it takes so many hours to graduate is the schools want the money for more hours in the filler programs.
Harvard isn't so hot look what they did with Bunny Obama. They've lowered their standards with this diversity movement instead of raising the standards for professor performance. Should be a way to pull tenure from lazy A$$ professors who don't teach but "write" lOL what a joke. They are paid to work not promote their reputations.
Instead of raising the cost of education, lower the cost and don't expect me the federal taxpayer to foot the bill for someone elses education. I've paid for mine and my children, enough is enough.
Very true. When I speak to graduates from the 60s-70s, it usually seems that they had in general 7 less general education classes and usually 5 less upper division courses. And really, why does it take THREE english classes to get a Bachelor's degree? Shouldn't you know how to write well enough by the time you graduate high school?
This is purely a ploy for Colleges to rob students for money. I've only ever seen classes being added to the curriculum, I never see classes removed.
For example, I hardly think we need to mandate a "Basic computers and introduction to the internet" course. Sounds great for like....3rd grade. Sounds like a big waste of f*cking money in college
And a college should NEVER offer REMEDIAL ANYTHING. It's effing college.... (these are the true public funds wasters in my opinion. I'm all for grants because there are some poor people that are brilliant, but the ones that aren't...need to repeat high school)
I wish people complained less about student debt and complained more about the bloated education system. When Americans achieve higher education and actually engineer things of use, the entire country benefits. So yes, I think student loan debt SHOULD be a government burden because it is the nation as a whole that stands to benefit from an educated workforce.
People act like students exist in a vacuum and that once they get jobs they just hoard all their money and never pay taxes (sales, property, income, investment income, etc). If there are jobs, students will pay this money back(principal + INTEREST ) , even if it takes several years. At the same time, they're also paying taxes.
No offense but I'd rather have a bunch of college-educated Romneys that pay taxes (hefty amounts too) than a bunch of non-educated Wal-Mart employees that are already so poor that asking them for taxes would be like stealing socks from a homeless man.
Greed has overtaken education. Chancellors don't need to make 300k a year, nor does any faculty, staff, administrator, board member, or professor. Pay at public universities should be limited to a max of 250% of the mean wages in America. I mean....if you're 250% more well off than half of America....I think that's enough.
Maybe these students should get a job while attending college. Or when they get out, get whatever they can while searching for that job they qualified for. Some student refuse to leave their home town and fail because they won't go where the jobs are located. I think most of this problem comes from poor parenting, no work ethic behind raising the child and no realistic goals set while they're growing up. It's all training.
I disagree with the "take any job" mentality. Devaluing education will not result in anything positive in the long run. If people work for those little pennies, companies will just use the current stranglehold to make exceptionally high demands (like a college degree) the norm. In my opinion, if they want college educated workers, they should pay for them (either pay the tuition, or pay a higher wage)
I think one of the most effective ways to bring value back to the college educated portion of society is to withhold talent. They can only import so many people on work Visas so they'll either have to ship out of US (which is highly unlikely. They're still here in this mess for a reason) or they'll have to pay a decent wage.
A good work ethic is NOT bending over and taking abuse just so you can earn starving wages. I don't know how that mentality developed. (BTW, even TWO FULL TIME MINIMUM WAGE JOBS IS ONLY $33,000 GROSS, not a lot of money to be sleep deprived, stressed to the hilt, and killing yourself slowly over.)
A good work ethic is making sure you're providing value to your employers in everything you do on the job. This means good attendance, and accurate, efficient, and thoughtful completion of your assigned duties.
All of the facts are great, but who's actually going to help out those in the payment phase of their loan? Its great the government is passing acts to help out future borrowers, but what about people who borrowed back in the early 2000's like myself and my wife? We have over $130K in student debt combined and we graduated 6 years ago. We both make good salaries, but now we have nearly a mortgage worth of student debt over the next 15 years - nobody stopped us from borrowing and we borrowed what we had to in order to graduate, with little help from parents or grants.
I'm concerned that so much vetting takes place with home lending, that those same guardrails aren't in place for students and parents who borrow insane amounts of money for school. They don't consider the repayment plan or the consequences of taking out loans that large without knowing if they'll have a job out of college that will match the student loan bill when payments kick in.
time to pay up !!
When the process of learning is no longer run as a profitable business, it will have the chance to become an affordable Institution of Education for any and everyone.
I'm sick of hearing students belly aching about student loans. Didn't these bright bulbs realize they would have a sizable debt when they first started school? Now they want an easy out like bankruptcy. The students of today will be the deadbeats of tomorrow. Their parents should be very proud.
Student debt is stunting the growth of the economy. Student loans have increased by 275% over past decade. As the next generation graduates from college, they are plagued by insurmountable debt that places demands on their income, limiting their ability to spend their earnings in ways that stimulate the economy.