Smart Borrower Blog

Archive for the ‘Student Borrowing’ Category

Credit Card Use Jumped in December

U.S. consumers pulled out their plastic in greater numbers for purchases in December, according to information from the Federal Reserve Tuesday. Total credit debt increased substantially as well. Revolving credit, such as credit card debt, grew by $2.76 billion in December to $800.98 billion, after rising $5.58 billion in November. Non-revolving credit, driven by student loans and auto loans, posted a $16.55 billion increase, to $1.697 trillion, also following a major jump in November. Total consumer credit debt rose by $19.31 billion in December, a striking increase compared with a prediction from economists surveyed by the Dow Jones Newswires that... more »

Fed Keeps Rate At Rock Bottom, No Changes Likely Until 2014

After its two day meeting, the Federal Reserve decided to leave its target interest rate unchanged, and also forecasted that it will not raise rates until the end of 2014. The federal funds rate, the Fed’s main method of affecting inflation and the economy, will remain in the range of zero to 0.25 percent for at least the next six weeks. It was predicted in a statement that, “Economic conditions…are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” Low Fed rates have kept mortgage, car and student loan rates exceptionally low for... more »

Consumer Borrowing Makes Biggest Jump since 2001

Consumers borrowed money at a higher rate in November than they have in a decade, according to the latest report from the Federal Reserve. Total consumer borrowing grew $20.4 billion in November to $2.48 trillion, posting the largest monthly gain since November 2001 when loans increased by $28 billion. The new total is almost back up to pre-recession levels and significantly above the September 2010 decrease of $2.39 billion. Credit card borrowing and other revolving credit accounts jumped up $5.6 billion, the largest increase since March 2008 and the third consecutive monthly gain. Auto loans also rose $14.8 billion, almost... more »

Middle Age Students Taking Out More Loans

Students in the middle-age bracket are accumulating college loan debt at a faster pace than any other age, according to analysis from Reuters, standing as another visible effect of the sluggish economy. The Reuters data found that while borrowing is up among all student age groups, it has really skyrocketed in the past three year among those who are between ages 35 and 49. Borrowing was up 47 percent for that age category, according to information Reuters obtained from credit tracking firm Credit Karma. The increase can be attributed, Credit Karma reports, to the turbulent economy that has found many... more »

Consumer Borrowing, Credit Card Use Up in October

Consumers continued to borrow more money in October, according to the latest figures from the Federal Reserve, and the trend could suggest either progress or danger. Total consumer credit grew by $7.6 billion to $2.457 trillion, outpacing September’s $6.88 billion increase. Americans have upped their spending and borrowing for 12 of the past 13 months, with August being the notable trend-breaker. Borrowing during that month fell by the most in 16 months. Still, in general U.S. consumers have been taking on more debt. Non-revolving credit, including student loans and car loans, rose 5.3 percent, or $7.28 billion in October. This... more »

Consumer Borrowing Makes Surprising Jump

Consumer credit borrowing in the U.S. increased substantially in September from the previous month, spurred on by rises in student and auto loans. Borrowing rose by $7.39 billion to a total of $2.542 trillion, according to the Federal Reserve. This was a particularly surprising increase after consumer credit fell $9.68 billion August, and analysts only predicted a growth of $4 billion for September. The increase was apparently led by a jump in borrowing for items like cars and tuition. Non-revolving credit, which includes both those types of loans rose $8.01 billion in September to a total of $1.662 trillion. Revolving... more »

Student Loan Debt Reaches Record Levels

Total student loan debt in the U.S. has surpassed national credit card debt, according to new figures from the Federal Reserve Bank of New York. New student loan funds borrowed last year grew to $100 billion dollars, a record high, and now total outstanding student loan debt has reached $1 trillion for the first time in history. Full-time undergraduate students borrowed an average of $4,983 last year, according to the College Board. That figure is more than double the average from 10 years ago, after adjusting for inflation. In the wake of the current economy, default rates on student loans... more »

Obama’s Relief Plan For Student Loan Holders

According to a Washington Post article, President Obama unleashed his new student loan relief plan initiative during an appearance at a Denver campus. Student loan relief is a current hot topic as student loan defaults are on the rise as graduates continue their efforts to find gainful employment in a struggling economy. The President announced during his speech that he would no longer wait for Congress to act and instead plans to impose his initiative through executive authority. During his speech he shared with the students he and his wife Michelle’s own struggles with paying off their student loans He... more »

Student Default Rate Makes Sharp Rise

Student loan borrowers are defaulting at a much higher rate, according to a new study from the Department of Education. This is yet another testament to the bleakness of the job market, as well as falling graduation rates. The Department of Education reported that the rate of default stood at 8.8 percent in 2010, up from the 7 percent in the fiscal 2008 year. Student loan borrowers at for-profit colleges performed the worst in that group. For the roughly 1 million students whose first payments were due October 1, 2008, 15 percent were more than 270 days late on their... more »

What S&P’s Downgrade of America’s Credit Means for College Students

The news these days are mired with stories about the debt ceiling and politics, but these events may mean very little to the average college student. But the consequences of the political and economic atmosphere will have very dire effects, and it will hit college students close to campus.   It starts with Standard and Poor’s reassessment of America’s credit rating, dropping it from a AAA rating to a AA+. S&P justified their decision to downgrade with a statement they released, stating:   The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed... more »