One in five adults age 20 and older have student loan debt and more than half of them worry they may be unable to repay their obligations, according to a study from the Urban Institute's Opportunity and Ownership Project.

Some 19.6% of adults have school-related debt, researchers Caroline Ratcliffe and Signe-Mary McKernan explain in "Forever in Your Debt: Who Has Student Loan Debt, and Who's Worried?" Fifty-seven percent are concerned about getting out from underneath that burden.

The study, funded by the FINRA Investor Education Foundation, used survey data from the organization's 2012 National Financial Capability Study. The FINRA Foundation developed the survey in consultation with the President's Advisory Council on Financial Capability and several federal agencies.

Student loan debt, the researchers determined, is not exclusive to the highly educated. Nine percent of people with no more than a high school diploma have such debt, possibly incurred for non-degree training or to fund a child's education. Twenty-five percent of those with some college experience but no degree have student loans, while 30% of college grads and 28% of those with advanced degrees contend with student debt.

While 16% of whites and 19% of Asians have student loan debt, 345 of blacks and 28% of Hispanics do so. Debt is held by adults fairly equally across the income spectrum. Twenty percent of those in households with annual incomes under $25,000 have student loans, just 2% more than those earning $100,000 or more.
Repayment concerns cut across demographic and economic groups but are more prevalent among people with financially dependent children, women, people not employed full time, and people with lower household incomes.

Seventy-two percent of student debt holders with incomes less than $25,000 are concerned about their ability to repay, twice the rate of those earning above $100,000 (a still substantial 36%).

While women are no more likely than men to have student loan debt, they are 8% more likely to worry about repaying it, even controlling for household income and other factors. Ratcliffe and McKernan conjecture that, because women are more likely to pay family bills, they may be more aware of the health of the household finances.

Ratcliffe and McKernan note the importance of being well-educated in today's economy and recommend several tactics to help more Americans reduce their reliance on student loans, reduce repayment anxiety, and make college more affordable:

    •    Prospective students should consider the likelihood of finishing their degree (nearly half do not complete in six years), earnings in their field, and the type of student loan (federal or private).?

    •    The maximum Pell grant could be increased and refundable tax credits expanded for low- and moderate-income families.?

    •    Enrollment in income-contingent repayment plans for federal loans could be eased.?  
    •    Current federal loans could be consolidated into a single income-based repayment program with borrowing limits.

"Helping young Americans take advantage of student loans to complete degrees but avoid burying themselves in student loan debt will enable wealth accumulation after they finish school," Ratcliffe and McKernan conclude. "Early steps in the right direction can help students move up the wealth-building ladder and attain economic security."

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