A Widely Cited Statistic That Supposedly Proved Student Debt Was a Rich Person Problem Was the Result of a Coding Error

Occupy Wall Street protesters demonstrate over student debt.
Dear Reader: Reuters hasn’t taken any good news photos for stories about student debt since 2012, so I’m stuck reusing this one, from an Occupy Wall Street protest, where borrowers hung signs with their balances from their necks. Andrew Burton/Reuters

Back in January, the Urban Institute—a widely respected Washington think tank—published a statistic about student debt that pretty soon caught fire among economics journalists. Based on an analysis of federal data, its researchers concluded that 49 percent of all outstanding education loans belonged to highest-earning quarter of American households.

Old, outdated graph
Urban Institute

In other words, student debt seemed to be heavily concentrated among the upper middle class. The number soon took off after David Leonhardt cited it in a New York Times column arguing that popular left-wing proposals to simply cancel all of those loans in a giant jubilee would be extremely regressive. I cited it too in some of my work on forgiveness. And it’s popped up frequently in this week’s conversation about Sen. Elizabeth Warren’s plan to wipe out much of America’s student loan burden, including in a Friday Washington Post column by Catherine Rampell that argued the proposal would be a giveaway to high earners.

It turns out that statistic was also wrong. After a bit of poking around this week, I learned that it was the result of a coding error by Urban’s researchers. The correct stat is that the top quarter of earners owe about one-third of all U.S. student loan debt—a significantly slimmer share.


Here’s how this all came to light.

Earlier this week, another think tank, the Brookings Institution, published an analysis of Warren’s loan forgiveness plan, which would cancel up to $50,000 of student loans for households making $100,000 or less and smaller amounts for higher earners. On Thursday, I decided to write it up and got on the phone with the report’s author, Adam Looney. During our chat, I asked if he’d mind sending over his own breakdown of how total loan debt was distributed between each income group. (Don’t ask why; I had an OCD desire to make an apples-to-apples comparison in the post that I ended up cutting.) Looney kindly shared his figures, which I noticed didn’t seem to match what Urban had previously published. We kibbitzed, he called Urban’s folks to see what was up, and they realized they had made an error in their stats code (it apparently involved an obscure issue with data weighting). They reran their numbers and sent over a correction. Here’s what the graph should look like: The top 25 percent of households only hold 34 percent of all outstanding loans.

Student debt held by households at each income quartile
Jordan Weissmann/Slate

To be clear, this error does not affect the analysis of Warren’s plan that I wrote about Thursday. However, it should change the way some people think about how student debt is spread among Americans, and who might be burdened by it. The upper middle class does hold a disproportionate share of all education loans—as you would expect, given that Americans who borrow to attend expensive graduate programs are the ones most likely to accumulate large balances. But the debt isn’t as concentrated as the previous figured suggested. Everybody should update their priors on this issue.

Also, dear think tankers: Please, for the love of God, check your code.