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Here’s something that shows the gravity of growing student loan debt: In 2009, the average monthly payment for student loan borrowers one year after graduation was 13% of monthly income. Researchers define a high monthly payment as more than 12% of monthly income. In fact, this likely understates the problem, as 29% of borrowers in that graduating class had not yet begun repaying their loans.

A new study for the National Center for Education Statistics compared several data points among first-time bachelor’s degree recipients who graduated in 1992-1993, 1999-2000 and 2007-2008. Looking at these groups one year after graduation (1994, 2001 and 2009), the researchers found the 2009 group borrowed more, earned less (in constant dollars) and spent more of their monthly income on student loan payments than the earlier groups.

The study focused on three main topics: Who borrowed, how many of them had loans in repayment one year after graduation and how did their debt burden affect their choices to live with parents or attend graduate school?

The percentage of undergraduates who borrowed and the average loan amount grew from 1994 to 2001 to 2009, and the greatest difference was between the 1994 group and the 2001 group. All money figures were adjusted to 2009 dollars. It’s common knowledge that the cost of higher education is rising, but salaries haven’t kept up.

The average salary for the 1994 group — those with and without loans — was $33,200. In 2001, it was $39,300 and in 2009 it was $34,400. In both 2001 and 2009, those who borrowed made less than those without debt.

Having a high debt burden was the norm in 2009, with an average monthly payment accounting for 13% of a borrower’s monthly income. The average debt burden in 1994 was 12%, and it was 11% in 2001, likely because of the higher salaries that year.

Only 22% and 18% of borrowers in 1994 and 2001 had debt burdens greater than 12%. In 2009, 31% of borrowers sent 13% or more of their monthly income to loan servicers.

Choices After Graduation

The 2009 group also had the smallest portion of borrowers in repayment one year after graduation: 60%, compared with 66% in 2001 and 65% in 1994. That’s reflected in the high percentage of graduates who either had a deferment or forbearance, were in a grace period or were in default (29% in 2009, 25% in 2001 and 18% in 1994). While that may indicate a rise in defaults, it might also be attributed to the rising number of borrowers who enrolled in graduate school within a year of finishing undergrad, as those students could have their loans deferred. Going to graduate school didn’t directly relate to debt burden, as enrollment rose among borrowers and non-borrowers alike.

Having debt also didn’t correlate with whether graduates moved back in with their parents within a year of graduating. In 1994 and 2009, 27% of graduates lived with family. Only 18% did so in 2001, when salaries were higher. In all three groups, those with no debt were only slightly less likely to live at their parents’ than their debt-laden peers.

Out of all the data presented, the most striking comparison may be the debt-to-income ratio. While the 2009 numbers are understandably dismal because of the economic conditions when those students graduated, student loan borrowing and default rates have continued to climb. This all gives a gloomy outlook on student borrowers’ return on investment.

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