According to 2020 data recently released by the Federal Reserve, more than half of student loan debt is owed by borrowers in the top 40% of income brackets. This pattern has held true in four surveys since 2001. Those in the bottom 40% hold just under 20% of debt.
Achieving higher levels of education adds more debt, but often boosts income. The 3% of adults with doctorates or professional degrees have median earnings double those of the general population, and owe 20% of all education debt. The debt pattern also means that any measures to forgive all of everyone’s debt would give most value to upper-income borrowers, increasing inequality.
The use of income-driven replacement plans, which don‘t require any payments from borrowers whose incomes are too low, helps explain why “out-of-pocket loan payments are concentrated among high-income households.”