American families spend more on student loans than on fuel or health care

Health care and transportation are necessities of modern American life.

The same is true for student loan payments.

According to a report released Wednesday by the JPMorgan Chase Institute, the average American family spends more money to pay back its education loans than for its daily needs such as fuel or health care.

The report, which sampled 4.6 million households paying student loans, gives a clear picture of the debt crisis related to student loans. The national student loan debt reaches a record $ 1.5 trillion, affecting 45 million Americans. And since tuition fees have doubled since the 1980s, student loans have become necessary for many low-income families, especially for black graduates.

The report also found that families spent 5.5% of their net income on student loans. However, one in four families spend more than 11% of this income on student loans. Low-income families and young borrowers spend the most. Account holders under 25 years of age spend at least 16.8% of their net income on their student loan, while 14.7% of family money is used for loans where they earn less than $ 50,000.

"While there is a consensus emerging on the growing role of student loan debt in America, there is still little data on how student loan payments fit into the monthly financial situation of students." most Americans, "said Diana Farrell, president and CEO of the JPMorgan Chase Institute, said in a statement.

Read more: These are the 15 worst states in the US to pay off your student loans

In addition to income, student debt is closely tied to cash flow. The report finds that student loan payments fall by 7% when borrowers lose their jobs. When unemployment benefits expire, these payments fall by 27%. In comparison, payments by credit card only decrease by 17%. As the chart below of the JPMorgan Chaste Institute report shows, spending increases sharply before borrowers start repaying their student loans and decline after they stop.

"By understanding the relationship between these student loan payments and other financial results, we hope to provide policymakers, lenders and other stakeholders with valuable information that can help develop policies to alleviate this burden." for American families, "said Farrell.

Some experts see troubling parallels with the 2008 financial crisis: according to MarketWatch, consumer debt is higher than it was just before the Great Recession. And some politicians, like Elizabeth Warren and Bernie Sanders, are currently preparing plans to cancel student loan debt.