A study at Ohio State University suggests that highly educated Americans were the most likely to accumulate debt that they couldn’t handle in the years leading up to the financial crisis of 2008.
The study defined households that spent over 40% of their income on debt, rent, and leases as facing a heavy debt burden. The overall percentage of Americans who fell in this category rose from 17% to 27% between 1992 and 2008, but it was college educated Americans who increased their debt percentage the most.
Furthermore, it wasn’t just homeowners who were responsible for the problem. While 21% of homeowners fell in the heavy debt category, a striking 35% percent of renters were doing just as bad.
This challenges the assumption that the impoverished were responsible for the problem, as well as the widespread belief that it was caused primarily by the housing industry. In fact, lenders of all kinds were taking bigger risks.
However, this also means it wasn’t necessarily lenders taking advantage of borrowers, as most of the debt was accumulated by educated people who “should have known better.”