Upper-middle class hit by student debt

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WASHINGTON, Aug. 9 (UPI) -- Upper-middle-income families in the United States have taken on the biggest increase in student loan debt from 2007-10, Federal Reserve data indicated.

Households with annual incomes of $94,535-$205,335 also saw a sharp increase in the amount of debt owed on average, The Wall Street Journal reported Thursday.

Federal Reserve data indicated that 25.6 percent of families in this income group had student loan debt in 2010, up from 19.5 percent in 2007. For households of all incomes, 19.1 percent had student debt in 2010, up from 15.2 percent in 2007.

The amount borrowed by upper-middle-income families rose in 2010 to $32.869 from $26,639 in 2007, an analysis by the Journal indicated.

"There's no doubt that this is a squeeze on a lot of household incomes that many people did not anticipate," says Wells Fargo chief economist John Silvia.

This squeeze has led more well-off families to look into second-tier schools where costs are cheaper, said Rhonda Ker, a private-college counselor in the Los Angeles area.

"I've been seeing these more realistic calculations and choices, rather than families just going for highest-ranked schools," she said.