Student loan debt owed as share of household income soars in the US (Chart)

from David Ruccio

According to a new report by the Pew Research Center, about one out of five (19 percent) of U.S. households owed student debt in 2010, more than double the share two decades earlier and a significant rise from the 15 percent they owed in 2007, just prior to the onset of the Second Great Depression.  

Because outstanding student debt has been rising and household incomes have been falling since 2007, outstanding educational debt has risen as a share of household income for all income groups considered. The outstanding student-debt-to-income ratio nearly doubled for the richest fifth of households from 2007 to 2010, but it remains the case that in both years the ratio of student debt to income was markedly higher for the lowest fifth of households by income. Student debt represented 15 cents of every dollar of household income for the lowest fifth of households in 2007. Even with the recent run-up, educational debt represents a much smaller share of household income for the richest fifth of households (2 cents on the dollar) in comparison to the lowest fifth of households (24 cents on the dollar).