The process of taking out student loans can be nerve-racking, but the reality of paying those loans back can be downright sobering—especially when a looming, large number suddenly becomes very real during the repayment period.

Between 2003 and 2013, the share of 25-year-olds with government and/or private-student-loans climbed from 25 percent to 45 percent. In the 2011-2012 academic year, 10 percent of college graduates had more than $50,000 in student loan debt—in 1999-2000 that number was only about 1 percent. Growing debt is largely the result of climbing tuition prices, which lead many students to lean more heavily on borrowing than they once did.

But even though the cost of tuition is rising, borrowing more money to bridge the gap can become problematic. “Increases in student borrowing and default rates raise concerns that some students may be borrowing too much,” according to a new paper from NBER, which takes a look at student-loan debt and instances of student-loan-debt default in an effort to uncover the best approach to repayment for both borrower and lender.

Along with the growing cost of tuition is a growing group of former students who have difficulty making their payments on time, or at all. According to the study, for people under the age of 30, the share who were late on their payments climbed to 35 percent in 2012, up from 20 percent in 2004.

Default is bad news for both borrowers and lenders. It can lead to damaged credit, garnished wages (for defaulting on federal loans), not to mention a mountain of stress. And while large lenders don't suffer the same strain as the individual in default, it's still bad for business since lenders lose an income stream and may become involved in lengthy legal actions if they attempt to collect the debt.

The reasons for lack of payment are varied: Sometimes it's economic hardship, sometimes it's lack of knowledge about how loan repayment works. Sometimes loans are simply forgotten about in the haze of post-school transitions. Whatever the cause, delinquent student loans aren't a rarity. For those who entered repayment in 2005, 57 percent have had periods where they did not make expected payments, according to the study.

The paper attempts to isolate borrower characteristics that help determine who is more likely to default on their student loans, though it doesn't go into detailed explanation of why some are more likely than others. The most significant discrepancies occurred among racial groups. Ten years post grad, black borrowers were more likely to be in default, owed 22 percent more on their loans, and had defaulted on 11 percent more loans than their white counterparts. The repayment habits of Hispanic borrowers more closely resembled white Americans, while the habits of Asian Americans more closely resembled blacks, with the exception that most defaults in the Asian group occurred after a larger portion of debt had been repaid.

There were also some differences when it came to majors. Ten years after graduating, engineering majors owed less than those who majored in social sciences or humanities. Humanities majors were the biggest culprits when it came to nonpayment and business majors were least likely to default on their debt.

The economy, to be certain, is a part of the issue: An unstable job market makes it more difficult to make payments consistently as grads struggle to find employment, are underemployed, or face layoffs. The larger amount of debt that modern grads carry, which can make repayment challenging even for someone who is working full time (but still earning meager wages), also plays a part. According to the repayment estimator provided by the Department of Education, a student graduating from a four-year, private, for-profit university can expect to owe an average of $34,722 and have a monthly bill of $350 in standard repayment.

Post-school income alone is not the tell-tale factor as to who won't make their loan payments. In the study, both low-income and high-income borrowers defaulted on their debt. What did play a role, particularly for low-income borrowers, was financial support. “Borrower income has small and statistically insignificant effects on the likelihood of repayment problems for those with modest savings and access to family assistance,” the study found. Among low-income borrowers without savings or financial help from their families, 59 percent faced difficulty repaying compared with less than 5 percent of low-income borrowers who had both savings and family assistance.

That might help explain the high rates of default among black Americans, a group with low wealth levels that could leave them unable to save and financially assist family members, according to the study.

The myriad of factors surrounding default may help make the case that shifting to a different standard for repayment could create a better system for both borrowers and lenders. The study found that “the optimal student loan arrangement must exhibit a flexible income-based repayment schedule to provide the maximal amount of insurance while ensuring proper incentives for borrowers to exert effort and honestly report their income.” Some flexible plans already exist. For instance the Pay As You Earn plan for federal loans allows borrowers to tie repayment to income, and to halt payments when their income drops below 150 percent of the poverty line, around $17,500 for a single individual based on 2014 figures, with the possibility of loan forgiveness after 20 years. But this type of flexible-repayment plan isn’t always widely available, particularly when it comes to private lenders who almost universally require more stringent, standard payments, and often have fewer options for troubled borrowers.

But the best payment structure is about more than just singular income thresholds, as the study notes. “Students of different abilities, making different investments, and borrowing different amounts should generally face different repayment schedules,” the study finds. That may mean that creating more nuanced grant and aid programs, as well as tailored lending and repayment programs that fit individual students, their earnings, and their financial resources—rather utilizing one-size-fits-all lending—could lead to better outcomes for everyone.