Smart Borrower Blog

Student Loan Debt Continues to Outpace Credit, Auto Debt


Mar 7th, 2012 @ 2:12 PM by Amber Nelson


Americans have more invested in student loans than they do in car loans or on their credit cards, according to new information from the economists at the Federal Reserve Bank of New York.

While this has been a trend for many months, student loan debt in the third quarter of 2011 now totals $870 billion for Americans across the country, representing a 2.1 percent increase from the second quarter. And as the New York Fed economists wrote on their blog ,

“With college enrollments increasing and the costs of attendance rising, this balance is expected to continue its upward trend.”

Other debt has been fairly stagnate. Total outstanding balances on auto loans is at $730 billion, and consumers have charged $693 billion on their credit card accounts.

A unique characteristic of student loans, however, is that it sticks around for longer periods of time. For example, a full one-third of the national student loan debt is held by people between the ages of 30 to 39 and another third is held by those in even older age brackets.

The New York Fed bloggers also pointed out that the student loan burden is not just on the student.

“Student loan debt is not just a concern for the young. Parents and the federal government shoulder a substantial part of the post-secondary education bill.”

And delinquencies are reported at about 14.4 percent of the 37 million borrowers nationwide. That figure might actually be higher, when those loans that are deferred while in school or immediately thereafter. When those borrowers are excluded, the delinquency rates would rise to 27 percent.

Another sign of difficulty in the student loan scene is that about 47 percent of all borrowers were in deferral or forbearance in the third quarter, meaning the did not have to pay for the last three months and their loan balances have stayed exactly the same.

 

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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