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Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.

Do the rich hold more student loan debt than the poor?

By Jacob Alabab-Moser
YES

According to Brookings, the wealthiest 20% of households hold a third of student debt while the poorest 20% of households hold 8%.

Universal student debt cancellation, which would forgive student loan debt regardless of income and wealth levels, would cancel a higher dollar amount of debt for the rich than for the poor.

The poor stand to receive more relative relief from student debt cancellation given their lower incomes. The Education Data Initiative reported in May that the bottom 25% of earners, who make $32,048 or less, have an average debt of $30,575—95% of their yearly income. In comparison, the top 1%, who make at least $373,894 annually, have an average debt of $40,550—10% of their income.

The Biden administration, which is working on a student debt cancellation plan, has suggested it would exclude those earning more than $125,000 per year. While some proponents argue this would avoid using tax dollars for those who don't need it, others maintain that it would create a complicated bureaucratic process that would make it harder for poor people to receive financial relief.

This fact brief is responsive to conversations such as this one.
ABOUT THE CONTRIBUTOR
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
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