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Trends in Student Loan Debt

Monday, October 1, 2018

The percentage of households with student loan debt has more than doubled in the past 24 years, according to an Employee Benefit Research Institute analysis of the Federal Reserve Board's Survey of Consumer Finances. In 2016, a substantial 22.3% of American households had outstanding student loans, up from 10.5% in 1992. The percentage of households with student loans increased in every age group during those years...

Percentage of households with student loans, 2016 (and 1992)
Under age 35: 44.8% (24.4%)
Aged 35 to 44: 34.3% (11.7%)
Aged 45 to 54: 23.7% (5.7%)
Aged 55 to 64: 12.9% (2.9%)
Aged 65-plus: 2.4% (1.2%)

Among households with student loans, the median amount owed has more than tripled, after adjusting for inflation – rising from $5,363 in 1992 to $19,000 in 2016. In the 35-to-44 age group, debt has quadrupled...

Median amount owed for student loans by debtors, 2016 (and 1992); in 2016 dollars
Under age 35: $18,500 ($5,363)
Aged 35 to 44: $20,100 ($4,860)
Aged 45 to 54: $20,000 ($6,201)
Aged 55 to 64: $18,000 ($12,234)
Aged 65-plus: $12,000 ($10,223)

While households with and without student loans are equally likely to have saved in a defined-contribution retirement plan, those without student loans have saved much more. Among householders aged 45 to 54 with a college degree, those without student loans had a median balance of $126,000 in their defined-contribution retirement plan in 2016. Those with student loans had a median balance of $46,000.

Student Loans Delay Homeownership

Student loans are preventing many younger adults from buying a home, according to a survey by the National Association of Realtors and American Student Assistance. Survey respondents were Millennials aged 22 to 35 who are currently repaying their student loans.

Eighty percent of respondents do not own a home, the survey found, and the single biggest reason is student debt. Fully 83% of respondents say student loans are causing them to delay home buying. The biggest reason for the delay is their inability to save for a downpayment (cited by 86%), followed by feeling financially insecure because of their debt (74%). How long will they delay buying a home? A median of seven years.

Student loan debt is also causing younger adults to delay other life decisions. The 55% majority of survey respondents say their  debt is causing them to delay starting a family, and 41% say it is causing them to delay getting married.

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