More students from affluent families taking on loans for college

Bloomberg News

Students from affluent families are taking out loans for college at twice the rate of two decades ago, making them the fasting-growing borrower group.

Fifty percent of graduates in the class of 2012 whose parents had incomes of more than $125,700 left college with loans, up from 24% about 20 years earlier, according to a study released Tuesday by the Pew Research Center. For graduates whose parental income was below $44,000, the rate rose to 77% from 67%.

“Across the spectrum, student debt has become an important way to pay for college, and even graduates from well-off families rely on debt,” said Richard Fry, an economist and primary author of the study.


The $1.2 trillion in outstanding education loans, which topped U.S. credit-card debt in 2010, continues to rise. So does the amount that students carry when leaving school. Graduates of the class of 2012 who took loans for a bachelor’s degree owed $29,400 on average, up from $23,450 in 2008, according to the nonprofit Institute for College Access & Success in Oakland.

In the early 1990s, only among graduates from low-income families did a majority finish college with student debt, said Fry, who analyzed data from the National Postsecondary Student Aid Study. “Now, solid majorities of graduates from middle-income families (both lower-middle and upper-middle) finish with debt, and half of students from the most affluent quartile of families do the same.”

Sixty-two percent of 2012 graduates from upper-middle-income households left college with loans, compared with 34% about 20 years ago, according to the study. Among lower-middle-income graduates, the rate climbed to 70% from 45%.

The study excluded loans taken out by parents to fund their children’s education.