"The payment-to-income ratio captures the share of a family's pre-tax income that goes toward required monthly debt payments, including mortgages, auto loans, credit cards, and student loans. A median of 13.4% means that half of indebted families spent less than that share of their income on servicing debt, and half spent more."
"Two pandemic programs ran concurrently with the survey period. Federal student loan payments were suspended under forbearance, and millions of mortgage borrowers entered forbearance plans that paused required payments. The SCF does not directly attribute the decline in payment-to-income to these programs, but the timing lines up."
The Federal Reserve's 2022 Survey of Consumer Finances revealed a median debt-payment-to-income ratio of 13.4%, the lowest recorded. This ratio measures the share of pre-tax income used for monthly debt payments. The decline is attributed to pandemic programs that suspended federal student loan payments and allowed mortgage forbearance. While the median ratio fell, the mean can be skewed by outliers. The survey indicated that 22% of families had student debt, with balances unchanged since 2019, highlighting that required payments, not balances, decreased.
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