A record one in five American households owed student debt in 2012, according to the Pew Research Center. Here are some other salient findings:

  • A record 40 percent of all households headed by someone younger than age 35 owe student debt, by far the highest share of any age group.
  • The relative student loan debt burden of is highest for households in the lowest income bracket, even though members from these households are less likely to attend college.
  • The average total indebtedness of the lowest income bracket grew from $17,579 in 2007 to $26,779 in 2010.
  • The average outstanding student loan balance rose from $23,349 in 2007 to $26,682 in 2010.
  • In 2007, 10 percent of student debtors owed more than $54,238. As of 2010, 10 percent of student debtor households owed more than $61,894 in inflation-adjusted 2011 dollars.

Because outstanding student debt has been rising and household incomes have been falling since 2007, outstanding school debt has grown as a share of household income for all income groups

Student debt has grown from 3 percent of outstanding total debt owed by households in 2007 to 5 percent of all debts in 2010. This reflects growing outstanding student debt and the fact that households have reduced their other debts.

A recent poll indicates 71 percent of students who borrowed money for college believe the cost of their degree will be worth it. Elsewhere, other students doubt that college is still the “golden ticket” to betters jobs it used to be.

The better policy path to college affordability is incentivizing college subsidies so that institutions keep costs down by streamlining administration, offering more flexible, competency-based programs for students, and tying funding to completions.

What won’t work is expecting students and their families to dig deeper debt holes while college costs are allowed to soar.