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Fewer Households Have Debt but More Have Student Loans

coins and change under a graduation cap
The Census Bureau recently found that while fewer American households have debt, those that still carry some have seen their debt levels increase.

According to the Bureau’s findings, the median amount of American household debt rose by nearly $20,000 between 2000 and 2011. The median debt loan for families in 2000 was $50,971 while in 2011 it was $70,000.

The press release—and the report from which it is based upon—also revealed that age was a factor in how much debt increased.

Dr. Alfred Gottschalck, Chief of the Labor Force Statistics Branch, and Economist for the Social, Economic and Housing Statistics Division at the U.S. Census Bureau, told us that those aged 35 and younger did not have a statistically different increase relative to the 35 to 44 age group.

“However, we can say that those 45 and younger had the largest increases in unsecured debt relative to those older than 45,” he said. Unsecured debt includes financing such as student loans and credit cards.

The report unveiled that credit card debt declined from 51 percent in 2000 to 38 percent in 2011.

Despite the often touted Student Debt Crisis, the Census Bureau did not prominently feature student loans in their findings. According to Gottschalck, it was not possible to say what portion of the increased debt is due directly to student loans.

The Census Bureau’s findings regarding individual economic worth were bleak. Median net worth rose from $81,821 in 2000 to $106,585 in 2005, and then collapsed to $68,828 in 2011. Largely to blame was the Great Recession: the largest recession to hit since before the Second World War.

“We cannot specifically say what effect the weak job market had on household debt, but changes in the business cycle and related economic conditions play a role in both debt and wealth changes over time,” said Gottschalck.

He pointed out that households incur debt in times of prosperity in order to purchase homes, vehicles or even to borrow student loans and pursue an education. Equally true, households take on debt to get through periods of unemployment, which landed at near 10 percent shortly after the Great Recession began.

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