Study: 20% of college students face ‘dangerous’ debt-to-income ratios

ABOUT 20% OF college students are projected to have debt-to-income ratios “approaching dangerous levels” after entering the workforce due to student loan debt, a new study by LendEdu finds.

PROVIDENCE – Nearly 1 in 5 college students will have future debt-to-income ratios “approaching dangerous levels” just from student loans after graduating and entering the workforce, according to a new study.

“We found that 16% of the nearly 10,000 student loan applicants [examined] have a projected [debt-to-income ratio] over 20%” for student loans alone, said Mike Brown, research analyst for LendEdu, an online marketplace for student loans and other financial products.

LendEdu produced the study by analyzing proprietary data from student loan lender Funding U.

“Student loan lenders see a projected DTI of 15% as ‘acceptable,’ while a DTI of 20% is seen as approaching a ‘dangerous’ level,” Brown explained in an email.

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Other key findings were that 28.1% of student loan applicants had a projected debt-to-income ratio above 15% just from student loan debt, while 15.6% had a projected debt-to-income ratio above 20% just from student loan debt.

The study also found the average projected debt-to-income ratio from student loan debt was 12.95% and the median projected debt-to-income ratio was 10.3% from student loan debt.

Debt-to-income ratios were calculated by comparing expected monthly debt payments, based on student loan statistics and other data, versus expected monthly income. Students’ future income levels were determined based on degree major and individual school statistics.

For debtors, Brown said, a debt-to-income ratio that is too high could eventually lead to default on their debt, or even bankruptcy.

For lenders, he added, lending to someone with a high debt-to-income ratio could lead to them not receiving monthly payments from the borrower and likely losing money on the loan.

For more details on the study’s findings, visit:

Scott Blake is a PBN staff writer. Email him at

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