Millions of Americans know all too well that student loans can be burdensome when it comes to taking care of all their financial needs and establishing some independence, and the number is rising considerably.
Through the end of 2010, about 19 percent of all households across the country had some amount of student debt, more than twice the number observed in 1989, according to new data from the Pew Research Center. That number was also a significant increase from even the amount of people with this kind of outstanding obligation in 2007, when the figure stood at 15 percent.
Perhaps not surprisingly, the number of people nationwide affected by this are disproportionately young, the report said. In all, roughly 40 percent of households whose head is younger than 35 carried some amount of student loan debt, far more than the next group – those between 35 and 44 – which came in at about 26 percent.
Among the households that did owe some money for education financing, the average balance rose to $26,682 in 2010, up from 2007’s $23,349, the report said. Further, 10 percent of the borrowers in the most recent period had debts totaling $61,894 or more.
Further, these balances have generally become more burdensome to consumers as well, taking up a larger proportion of their household income, the report said. For instance, in households making less than $21,044 per year – the lowest one-fifth of consumers – borrowers owed about 24 percent in student loan debts in 2010, compared with just 15 percent in 2007. Similarly, the second-lowest group, with incomes between $21,044 and $36,723, saw these balances take up 10 percent of that total, up from 7 percent just three years earlier.
Recent studies have shown that the average college student is now graduating with tens of thousands of dollars in not only education financing debt, but on credit card balances, auto loans and the like. In general, experts agree that having obligations of this size can make it very difficult for young adults to establish their financial independence within a short time of graduation. This is especially true given the obligations they may have to begin paying those balances back immediately, and the continuing difficulty in the job market for young adults.
Image: Donkey Hotey, via Flickr