I have previously written about the deeply flawed Brookings Institution analysis on student debt with its oft-repeated lede:
These data indicate that typical borrowers are no worse off now than they were a generation ago …
Their data is based on the triennial Survey of Consumer Finances (SCF) by the Federal Reserve Board, with the report based on 2010 data. With the release of the 2013 SCF data, Brookings Institution put out an update this week on their report, and they continue with the lede:
The 2013 data confirm that Americans who borrowed to finance their educations are no worse off today than they were a generation ago. Given the rising returns to postsecondary education, they are probably better off, on average. But just because higher education is still a good investment for most students does not mean that high and rising college costs should be left unquestioned.
This conclusion is drawn despite the following observations of changes from 2010 – 2013 in their own update:
- The share of young (age 20 – 40) households with student debt rose from 36% to 38%;
- The average amount of debt per household rose 14%;
- The distribution of debt holders rose by 50% for debt levels of $20k – $75k and dropped by 19% for debt levels of $1k – $10k; and
- Wage income is stagnant and same level as ~1999, yet debt amounts have risen by ~50% in that same time period (see below).
