NCPA - National Center for Policy Analysis

Americans with the Highest Student Debt Are More Likely to Pay Loans

February 23, 2015

A new trend among Americans has emerged: Debtors are more likely to pay back their loans the more money they borrowed for school compared to those who borrowed less. Why? Americans with larger student loans have accumulated the debt by enrolling in longer and more expensive educational programs, such as medical school and law school. However, these borrowers typically earn much higher salaries, allowing them to repay their loans with greater ease.

In contrast, those with less student loan debt are usually college dropouts who attend college for a couple semesters without earning a degree. Unable to find a job that pays enough to make the minimum payments, they ultimately lack the income to repay the balance. Borrowers default after not making a payment for 270 days.


  • One third of those owing less than $5,000 have defaulted since December 31, 2014, more than one-fifth of individuals with outstanding student loans.
  • Meanwhile, the default on loans exceeding $100,000 is only 17.6 percent.

Americans with the highest student debt but earning higher salaries are also more likely to opt into income-based repayment programs, which experts maintain disproportionately favor high-income earners.

Source: Josh Mitchell, "Who's Most Likely to Default on Student Loans?"  Wall Street Journal, February 19, 2015.


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