Who Owes the Most Student Loan Debt?

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Kristen Kuchar

By Kristen Kuchar

March 30, 2021

A new study from Brookings Institute released new data on who exactly is holding the $1.5 trillion that American owes in student loan debt. 

The report concludes that majority of student loan debt is held in households that have higher earnings and a graduate degree. 

The highest-income 40% of households (those with incomes above $74,000) owe almost 60% of student loan debt. These borrowers make almost three-quarters of student loan payments.

The lowest-income 40% of households hold just under 20% of student loans and make only 10% of the payments.

Brookings attributes this to two factors. First, people from higher-income households are more likely to go to college. Second, people with a college or graduate degree earn substantially more in the labor market than those who never went to college.

In 2019, households with graduate degrees owed 56% of the outstanding education debt. And the 3% of adults with a professional or doctorate degree hold 20% of student loans. The median income in these households are twice as high as the overall median – $106,000 versus $47,000 in 2019.

Here’s the breakdown by degree:

  • No college degree: 8%
  • Associate’s Degree: 7% 
  • Bachelor’s Degree: 29%
  • Master’s Degree: 36%
  • Professional/Doctoral: 20%
Distribution of student loan debt by degree Pie chart

College graduates, on average, earn more than those who do not graduate from college. Previous research from the Federal Reserve Bank of New York concluded that the average college graduate earns $78,000 per year compared to high school graduates earning $45,000 per year. 

Public Service Loan Forgiveness

Some graduates with federal student loans may qualify for Public Service Loan Forgiveness. For those earning Master’s Degrees and Professional and Doctoral Degrees, there are loan forgiveness options for lawyers, doctors, dentists, pharmacists, veterinarians, and nurses. See which jobs qualify for student loan forgiveness.

Refinancing Student Loans

High earners with stable income and with student loan debt have a better chance of being approved of a student loan refinance, which could result in a lower interest rate. However, any student loan borrower with federal student loans should think carefully before refinancing any federal student loans. Federal student loans come with many benefits over private loans that are lost when you refinance. These include the option for monthly payments based on income and family size, potential public service loan forgiveness, possible widespread forgiveness, some subsidized loans, generous deferment options if you lose your job or have an economic hardship and potential widespread loan forgiveness.

If you’ve weight the pros and cons refinancing, and have decided refinancing is the best option for your loans, check out our list of best lenders.

Other Options for Student Loans

The ChangEd App is a great tool for repaying your student loans. It rounds up every purchase you make and applies that amount directly to your student loans. Read our ChanEd App review.

You can also consider moving to a location that offers student loan repayment or working for a company that will help you pay your debt.

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