Student Loans Affecting Upper-Middle-Income Families

By Catherine Groux
Posted August 09, 2012 09:53 AM

Today, more upper-middle-income families are taking out student loans.
Today, more upper-middle-income families are taking out student loans.
With national student loan debt reaching $1 trillion, even families with a relatively high income are struggling to pay back the money they borrowed for college. However, according to a new Wall Street Journal analysis on Federal Reserve data, upper-middle-income families - or those with incomes between $94,535 and $205,335 - have seen the sharpest increase in student loan debt in recent years.

In 2007, about 19.5% of upper-middle-income households said they had student loan debt. By 2010, this figure increased to 25.6%, the Federal Reserve data shows. While the share of upper-middle-class families with student loan debt rose by 6.1 percentage points in this time frame, among all households, this figure only increased by 3.9 percentage points.

Additionally, as many upper-middle-income families are willing to spend the extra money on more expensive private schools, the Journal reports that the amount of money they borrow has skyrocketed. Between 2007 and 2010, the amount borrowed by these households rose from $26,639 to $32,869, after adjusting for inflation.

Overall, the Federal Reserve data shows that as of 2010, more than 3 million households across the nation owed at least $50,000 in student loans, marking a sharp increase from 794,000 in 2001.

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