Young Adult Borrowing is Down, While Student Loan Debt is Up

The Pew Research Center recently released Young Adults After the Recession: Fewer Homes, Fewer Cars, Less Debt. The study examines the borrowing habits of younger Americans over the last decade. The report concludes that they are taking on less debt, primarily in the areas of home mortgages and car loans. In part this is the consequence of delayed marriage and household formation among the younger demographic group. The Pew study found that “the median debt of households headed by those younger than 35 fell from 2001 ($17,938) to 2010 ($15,473).”

Unfortunately, the only type of debt to increase in recent years has been from student loans. Pew found that

Student debt was the only major type of debt to increase in prevalence among young households during the recession. In 2007, 34% of young households had outstanding student debt. By 2010, 40% of younger households had student debt. However, the median amount owed by households with student debt fell from $14,102 in 2007 to $13,410 in 2010.

This number is up substantially from 2001 when only 26% of younger households had outstanding student loan debt. Debt from student loans has also increased as a proportion of outstanding debt: from 7% in 2001 to 15% in 2010.