What Percentage of the U.S. Population Has Student Loan Debt?
People who get advanced degrees tend to accumulate more debt but are also likely to make payments on their student loans on time.
Borrowers who never completed a degree tend to have a harder time paying off their loans. About 31% of people who took out student loans but never completed an associate or bachelor’s degree are behind on their payments.
Though people with more advanced degrees tend to take on more debt, they’re more likely to make their student loan payments on time. Of the former college students with less than $15,000 of outstanding debt, 21% are delinquent. However, only 17% of adults with $15,000 or more in loans are behind on payments.
Economic Impact of Debt Cancellation
The sheer size of student debt can be characterized as a weight on the U.S. economy as well as a burden on the millions of individuals who owe it. About 92% of student loan debt is backed by the U.S. government. That fact has made it a political issue. During the 2020 presidential election, some Democratic candidates-among them Sen. Elizabeth Warren (D-Mass.) and then-Senate Minority Leader Chuck Schumer (D-N.Y.)-suggested canceling some or all student debt. They said it could be done by a president’s executive order rather than through legislation. In 2021, Sen. Warren continued to call on the administration to cancel up to $50,000 in federal student loan debt for each borrower.
The American Rescue Plan passed by Congress and signed by President Biden in includes a provision that student loan forgiveness issued between , will not be taxable to the recipient.
Pros and Cons of Debt Cancellation
Moody’s Investor Service predicts wiping out student debt would yield a stimulus to economic activity that is comparable to tax cuts in the near term, according to reporting by CNBC. (más…)