Who owes the most in student loans? (www.brookings.edu)

Recently released data from the Federal Reserve’s Survey of Consumer Finances confirm that upper-income households account for a disproportionate share of student loan debt—and an even larger share of monthly out-of-pocket student debt payments.

Most news stories and reports about student debt cite the fact that Americans owe more than $1.5 trillion. The fact that households in the upper half of the income distribution and those with graduate degrees hold a disproportionate share of that debt almost never makes it into the narrative. But who owes education debt is as important as how much debt there is. Only with this information can we determine who struggles because of their student loans and who is succeeding in the job market because of the education that loans helped them achieve.

Recently released data from the Federal Reserve’s Survey of Consumer Finances confirm that upper-income households account for a disproportionate share of student loan debt—and an even larger share of monthly out-of-pocket student debt payments.

The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt and make almost three-quarters of the payments. The lowest-income 40 percent of households hold just under 20 percent of the outstanding debt and make only 10 percent of the payments. It should be no surprise that higher-income households owe more student debt than others. Students from higher-income households are more likely to go to college in the first place. And workers with a college or graduate degree earn substantially more in the labor market than those who never went to college.

What may be more surprising, however, is the difference in payment burdens. A growing share of borrowers participate in income-driven repayment (IDR) plans, which do not require any payments from those whose incomes are too low and limit payments to an affordable share of income for others. And some borrowers are in forbearance or deferment because of financial hardships. As a result, out-of-pocket loan payments are concentrated among high-income households; few low-income households enrolled in IDR are required to make payments. [ … ]

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live wire
10 months ago

This article makes it sound like there is merit behind student debt … the college degrees the upper middle class take out is compensated by their ultimate incomes. I’m skeptical whether that is really true.

laver
10 months ago

Some of the student debt is for useless, made-up woke degrees such as social justice, gender studies, and yes, even disruption .

takeout
10 months ago

No one wants to hear that student debt is largely carried by those who actually can afford to pay it off. It doesn’t fit the Dems’ liberal socialist agenda.

salty
10 months ago

Salie Mae:
The only college friend you’ll have for the rest of your life
https://saltydictionary.com/salie-mae/

Kronos
10 months ago

You know who put that not forgiving student loan bill on the floor in congress 2005?
Xiden.

Nein
10 months ago

Take the endowments, pay off their student’s loans, problem solved. Abolish future student loans and tuition will plummet.

Toni
10 months ago

The top and the bottom don’t owe jack. Evil middle class white-supremacist taxpayers do!

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