Dive Brief:
- Forty-six percent of student-loan borrowers are making inconsistent payments, according to a JPMorgan Chase Institute report released Wednesday. The new study is based on JPMorgan Chase checking-account customer data from more than 4 million families who paid student loans between 2012 and 2018.
- The burden falls disproportionately on young and lower-income borrowers. A quarter of borrowers under age 25 spends 16.8% or more of take-home pay on student loans, while households making $50,000 or less spent 14.7% or more. By income group, 44% of low-income families made consistent loan payments, compared to 63% of high-income families that did, the institute found.
- Balances of outstanding student loans have more than doubled in the past decade to about $1.5 trillion, according to data from the Federal Bank of New York.
Dive Insight:
About one in four families spends at least 11 percent of take-home income on student loans in months with positive payments — more than they spend on out-of-pocket health care costs or fuel, JPMorgan Chase Institute research showed.
Borrowers are alternating between months of larger payments or no payment at all, the institute found, and as many as 59% might be making no payment at any given time. Families are less consistent paying loans for higher education than those for cars and homes, the report found.
About 18% of Americans have student loans, a figure that has remained steady since 2016, and has increased from 10% in 2004, according to a New York Fed report in May.
The institute aims to use data from the U.S.'s biggest bank to inform businesses' and policy makers' decisions.
