Description
As Americans pursue more education, they also accrue more debt. Outstanding student loan balances in the United States total roughly $1 trillion.
B
allooning student loan debt has
contributed to the lower wealth accu-
mulation of Generations X and Y
(Steuerle et al. 2013). Beyond the
short-term burden of repaying loan balances
and interest, this early debt can delay building
a rainy day fund, saving for retirement, and
homeownership. However, like homeowner-
ship and mortgage debt, college and the
accompanying student loan debt is an
investment that can pay off in the future. For
the roughly 50 percent of people who com-
plete degrees, college is still a good investment
on average (Avery and Turner 2012).
Student loan debt follows one of every ?ve
Americans age 20 or older
1
and roughly two
of every three college seniors who graduated
in 2011 (Reed and Cochrane 2012). These
recent college graduates owe nearly $27,000
on average. The Great Recession likely added
to debt holders’ concerns: graduates starting
out their careers are looking for work in a
weak labor market, while older borrowers
with student loan debt may be struggling
because of declines in other assets (e.g.,
houses or retirement accounts). A delin-
quency rate of 17 percent is stark evidence
that many Americans struggle to repay their
student loans (Edmiston, Brooks, and
Shelpelwich 2013).
2
Using the FINRA Investor Education
Foundation’s 2012 National Financial Capa-
bility Study (NFCS), this brief examines who
has student loan debt and who is worried
about their ability to repay.
3
Over half (57
percent) of people with student loans are con-
cerned that they may be unable to repay that
debt.
4
This concern cuts across demographic
and economic groups but is more prevalent
among people with ?nancially dependent
children, women, people not employed full
time, and people with lower household
incomes.
&.3 H(6 #78+=27 L3(2 D=)7?
The 20 percent of U.S. adults age 20 and older
who have student loan debt are a varied group:
young and old, white and nonwhite, men and
women, low income and high income, college
educated and not. The likelihood of having
student loan debt does, however, differ signi?-
cantly across these subgroups.
Student loan debt is not exclusive to the
highly educated. Nine percent of people with
no more than a high school degree have
student loan debt (?gure 2). They could have
incurred this debt for a nondegree training
certi?cate or by funding a child’s education.
The fraction increases to 25 percent for people
with some college education but no college
degree. Some of these people could still
be in school, others may have completed a
F35=9=5 /2 '385 D=)7
&.3 H(6 #78+=27 L3(2 D=)7, (2+ &.3
As Americans pursue more education, they also accrue more debt. Outstanding student loan balances in the United States total roughly $1 trillion.
B
allooning student loan debt has
contributed to the lower wealth accu-
mulation of Generations X and Y
(Steuerle et al. 2013). Beyond the
short-term burden of repaying loan balances
and interest, this early debt can delay building
a rainy day fund, saving for retirement, and
homeownership. However, like homeowner-
ship and mortgage debt, college and the
accompanying student loan debt is an
investment that can pay off in the future. For
the roughly 50 percent of people who com-
plete degrees, college is still a good investment
on average (Avery and Turner 2012).
Student loan debt follows one of every ?ve
Americans age 20 or older
1
and roughly two
of every three college seniors who graduated
in 2011 (Reed and Cochrane 2012). These
recent college graduates owe nearly $27,000
on average. The Great Recession likely added
to debt holders’ concerns: graduates starting
out their careers are looking for work in a
weak labor market, while older borrowers
with student loan debt may be struggling
because of declines in other assets (e.g.,
houses or retirement accounts). A delin-
quency rate of 17 percent is stark evidence
that many Americans struggle to repay their
student loans (Edmiston, Brooks, and
Shelpelwich 2013).
2
Using the FINRA Investor Education
Foundation’s 2012 National Financial Capa-
bility Study (NFCS), this brief examines who
has student loan debt and who is worried
about their ability to repay.
3
Over half (57
percent) of people with student loans are con-
cerned that they may be unable to repay that
debt.
4
This concern cuts across demographic
and economic groups but is more prevalent
among people with ?nancially dependent
children, women, people not employed full
time, and people with lower household
incomes.
&.3 H(6 #78+=27 L3(2 D=)7?
The 20 percent of U.S. adults age 20 and older
who have student loan debt are a varied group:
young and old, white and nonwhite, men and
women, low income and high income, college
educated and not. The likelihood of having
student loan debt does, however, differ signi?-
cantly across these subgroups.
Student loan debt is not exclusive to the
highly educated. Nine percent of people with
no more than a high school degree have
student loan debt (?gure 2). They could have
incurred this debt for a nondegree training
certi?cate or by funding a child’s education.
The fraction increases to 25 percent for people
with some college education but no college
degree. Some of these people could still
be in school, others may have completed a
F35=9=5 /2 '385 D=)7
&.3 H(6 #78+=27 L3(2 D=)7, (2+ &.3