According to a new report from TransUnion, the burden of student loans on young people, ages 20 through 29, is much heavier than it was for that age group a decade ago. Charlie Wise, a vice president at TransUnion, looks at what is called the “consumer loan wallet” – how debt shakes out.
“Certainly, that student loan piece is a much, much larger share of that overall wallet,” he says. “In fact, it has nearly tripled between 2005 and 2014.”
On average, a twentysomething today has about $25,000 in student loan debt. That is up about $10,000 from 2005. Older borrowers are also carrying more student loan debt, in part because they co-signed loans with kids and grandkids.
Mortgages are down, as a percentage of young American’s debt. “If you were to look at that as a graphic, a bar chart, you would essentially see that the decline in mortgages is almost exactly matched by the increase in the student loan piece,” Wise explains.
There are several reasons for that. According to Brent Ambrose, the Smeal Professor of Risk Management at Penn State University, “lenders have been tightening underwriting standards; so, it is more difficult to get a mortgage now.”
Today’s twentysomethings may have learned a thing or two from the downturn. Less of their debt is credit card debt.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.