Paying off student loans is not just a personal problem, it is often a family issue, according to a new in-depth report by JPMorgan Chase.
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Nearly 19 percent of individuals report receiving help to pay off student loans, showing that it often affects “families’ larger financial lives” as opposed to just the individual borrower’s.
The report shows that student loan debt is the fastest growing category of household debt in the country. According to the research, it has more than doubled over the last decade to $1.5 trillion in 2018, trailing behind only mortgage debt.
The findings, which used data from more than 4.6 million families who made at least one student loan between October 2012 and July 2018, also note that nearly 45 million borrowers are affected by the "student loan crisis.”
In some cases, the issue is so bad some “families are spending more on student loans than key categories of basic necessities,” the report said.
Younger student loan borrowers who come from lower income families tend to be burdened the most. Many in this category, between ages 18 and 24, are spending up to 17 percent of their annual income on repayments.
According to Chase’s findings, one of the biggest issues for policymakers is that is the lack of data on how families—not individual borrowers—are taking the blow from student loan repayments.
“By understanding the relationship between these student loan payments and other financial outcomes, we hope to provide policymakers, lenders and other stakeholders with valuable information that can help shape policies to ease this burden for America’s families,” Diana Farrell, President and CEO of the JPMorgan Chase Institute, said in a previous statement.
The median student loan payment for a typical American family is $179 a month, or 5.5 percent of take-home income in months with positive payments. One in four families spend more than 11 percent of their take-home pay on student loans.
The consistency of paying loans also has a distinct difference across income levels. Around 54 percent of families make consistent student loan repayments, but low-income families are less likely to. An estimated 44 percent of low-income families are able to make consistent loan payments compared to 63 percent of high-income families.