One-Fifth of Households Slammed by Student Debt

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A record choice of American households carry student loan debt, while the common outstanding loan balance is the best it?s ever been, in line with a brand new report from the Pew Research Center. The Pew analysis found that about one out of 5 (19 percent) households, or around ***a***22.3 million, were burdened with student debt in 2010. That figure is greater than double the 9 percent it was in 1989, and it marks an incredible jump from 15 percent in 2007.

Here are among the more alarming figures from the report:

• The average outstanding student loan balance rose from $23,349 in 2007 to $26,682 in 2010.
• Most debtor households had lower than $50,000 in outstanding student debt in 2010. However the share of households owing high amounts has climbed: In 2007, 10 percent of debtors owed greater than $54,238. By 2010, 10 percent of them owed greater than $61,894 (adjusted for inflation).
• Among households headed by someone younger than 35 years old, a record 40 percent owed student debt in 2010.

Student loan debt hit $904 billion inside the first quarter of 2012, a $30 billion increase from the former quarter, and up from $241 billion a decade ago, in step with the Federal Reserve Bank of latest York?s quarterly report on household debt. The shopper Financial Protection Bureau puts total student loan debt above $1 trillion. (Read more: America?s Student Loan Crisis: It is not the Debt, It is the Loss of Jobs.)

One added twist on this report shows the groups impacted most by the debt increases are at opposite ends of the income spectrum ? the poorest and wealthiest households. In 2010, the bottom fifth of households by income owed 13 percent of all outstanding student debt, up from 11 percent in 2007. For the richest fifth, that figure rose from 28 percent to 31 percent over the identical period.

Another striking item from the report is that student debt is rising while households are reducing their other debts. Student debt rose from 3 percent of exceptional total debt owed by households in 2007 to 5percent of all debts in 2010. Meanwhile, average household debt fell from $105,297 in 2007 to $100,720 in 2010, a 4.3 percent drop.

Driving the upward thrust in outstanding student debt, says Richard Fry, a senior economist at Pew who authored the report, are several factors, the 1st of that is the pointy growth in college enrollment in the course of the Great Recession.

• There were 18.2 million students enrolled in college within the fall of 2007, and 21 million in 2010 ? a fifteen percent increase, the report says.
• College students are increasingly borrowing to finance their education, and borrowing in greater amounts. In 2009-10, 51.1 percent of full-time, first-time undergraduate students had a student loan, a rise from the 43.5 percent of such students in 2006-07.
• The average public, four-year college graduate had accumulated $22,000 (in 2010 dollars) in debt upon receiving a bachelor?s degree in 2009-10, up from $20,500 (in 2010 dollars) in 2006-07.

Copyright 2012 Yahoo! Finance

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