By Betsy Prueter
The recently released 2013 Survey of Consumer Finances from The Federal Reserve points to increased student loan debt among young Americans (families headed by someone under 40 years old) since 2010 while showing that most other forms of debt (household, vehicle, credit card, etc.) are in decline. The report examines changes in the last three years (the last time this report was released) and looks specifically at the impact of debt over the last 12 years, comparing 2013 data to information gathered in 2001.
Among the report’s findings:
- Overall, debt burdens have decreased since 2010. The median debt declined by 20 percent and there was a nearly 20 percent decrease in families’ median and mean credit card balances.
- Student debt does not follow this trend. 20 percent of families had an education loan in 2013, up from 19.2 percent in 2010. The median value of those individual loans increased by $2,100 since 2010.
- The overall average total student loan debt rose by $1,400 (from $27,500 to $28,900) from 2010.
- Looking back over the last 12 years, the fraction of young American families with student loan debt grew to nearly 40 percent compared to just over 22 percent in 2001.
- The proportion of young American families with debt greater than $50,000 has increased from 5 percent in 2001 to 13 percent in 2013. o Additionally, the proportion of young American families with debt greater than $100,000 has increased from under 1 percent in 2001 to over 5 percent in 2013.
- Lower income families are increasingly hit hard with student loan debt. 24% of the total student loan debt of young families’ is held by those making less than $30,000 a year, double in the rate in 2001.
- There may be some good news. While debt is rising, the rate of growth appears to be slowing- at least according to a recent report published by the Brookings Institution.
- The report shows that while the mean debt grew by 14 percent from 2010 to 2013, it had previously increased by 42 percent between 2007 and 2010, by 35 percent between 2004 and 2007 and by 18 percent between 2001 and 2004.
- The report finds that about one-quarter of the increase in student debt between 1989 and 2010 can be attributed to increases in education attainment, particularly at the graduate level.
- Finally, the monthly payment burden faced by student loan borrowers stayed about the same or lessened from 1992 to 2010.
- Supporting the Brookings’ report analysis, the Survey of Consumer Finance does note that the majority of young families with education debt owed less than $25,000 in both 2001 and 2013 and that the share of families with large balances is relatively small.