A few weeks ago we reported on the older faces of ballooning student loan debt. Our story was prompted by numbers on student debt released by the New York Federal Reserve showing that Americans over age 40 make up a third of the people who currently hold student loan debt.
But the larger issue – the sheer volume of all student loan debt in this country – was also shocking. The Fed pegged the total amount of outstanding student loans at $902 billion – up from $363 billion in 2005.
Now, the Pew Research Center has released a report using data from the Survey of Consumer Finances that bolsters what we’ve heard from so many people: that student loan debt burdens are going up — and that the economy seems to be driving that increase.
Instead of looking at how much student loan debt is out there, or how many total borrowers there are in the nation, Pew looked at households: Specifically, what percentage of households are dealing with some form of student debt?
It might not be surprising that Pew found that percentage has gone up dramatically – in the past 20 years, but also notably just before the start of the latest recession. The most recent data Pew used is from 2010, but even with a two-year lag, the numbers paint a stark picture. In this chart (see right) from Pew, you’ll notice first the tremendous increase in the percentage of households with outstanding student debt between 1989 (when debt clocked in at only 9 percent) to 2010 (when it had risen to 19 percent).
Look closer, and you’ll also see how the percentage jumped between 2007 and 2010, from 15 percent to 19 percent. In that same time period, Pew found that average outstanding household loan debt increased from $23,349 to $26,682.
More households owe more in student loan debt than ever before. And the trend shows no sign of letting up. One big question is whether an improving economy will decrease school enrollment — especially for older Americans — or if increased employment will make families feel even more comfortable taking on debt for education.
>> Help us cover this story: Did you think you’d pay off student loans before age 40?