USA: People with student loans have a massively lower net worth than those without them, and loan-holders with a college education are also more likely to have other debts, according to new study results released Wednesday.

A Pew Research Study found that in households headed by a college-educated person under 40 with student loan debt, the median net worth is $8,700 – compared to almost $65,000 for households headed by someone who is college-educated but doesn’t have student loan debt.

In households headed by someone who has not obtained a bachelor’s degree, median net worth was still slightly higher at $10,900. The study defined "college educated" as someone with at least a bachelor’s degree.

Net worth is the difference between someone's assets – such as a home, car, investment or savings account – and their expenses such as loans, credit card debt or mortgage payments.

The study found that young households burdened by student debt are also the most likely to have other debt, such as credit card debt or car payments, and the high debt burden forces them to delay major purchases such as buying a home.

When mortgage, credit card, vehicle and student debt are added together, the total indebtedness among younger college-educated households  averages $137,010 – nearly double the amount for college-educated households without student loan debt, at $73,250. It is also more than 10 times as much debt as that of households headed by someone without a college education, which average around $28,300 in total debt.

The study notes that while the debt burden is high for college-educated households with student-loans, it is partially because their education grants them greater access to financial resources – which allows them to borrow more for other things such as cars because they can afford to carry more debt.

The high debt burden puts college-educated households with student loans nearly 10 years behind in building up wealth for their nest eggs, lead researcher Richard Frye told the Christian Science Monitor.

Those with student loan debt are also the most unsatisfied with their financial situation. Of those who borrowed money to get a college education, 29 percent say they are financially dissatisfied, compared with just 14 percent of those who did not borrow for college.

Student debt is now the second-largest debt burden in the United States, eclipsing credit card debt and coming in second only to mortgage debt. It is estimated that 19 percent of American households, or nearly one in five, owed student debt in 2010 – double the rate from two decades ago.

Total student loan debt topped $1.2 trillion this year, and the high cost of a college education has some financial experts and politicians worried that a student loan debt “bubble” could tank the fragile economy – in much the same way the housing bubble did at the onset of the financial crisis in 2008.

The Pew Research study says the average debt burden for all student loan debt is $13,000, though people who choose to pursue advanced degrees from graduate school often have a much higher debt burden.



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