Fed: Student Loan Debt Surpasses Auto, Credit Card Debt

A study by the Federal Reserve Bank of New York corroborates what Dann Adams at Equifax in St. Louis has been telling us: Student loan debt is now higher than credit card and auto loan debt and is second only to mortgage loan debt.

Student loan debt totals almost $1 trillion, twice what it was in 2007. Auto loan debt totals $783 billion, and credit card debt totals $679 billion.

As you no doubt knew, the problem isn’t just high unemployment and reduced job prospects. “High levels of student debt are correlated with higher tuition and fees,” the study states. “From 1993 to 2011, education costs increased 165 percent.”

Why are tuition and fees so high? In part, because “the federal government’s involvement in providing financial aid to students may have led to unchecked growth in college costs,” the study found.

Almost 40 percent of student loan borrowers owe up to $10,000; 30 percent more owe up to $25,000; and 0.6 percent owe $200,000 or more.

Adams, president of the Equifax Workforce Solutions division, told the Business Journal in January that delinquency rates on all consumer loans are falling — except student loans.


Leave a Reply

Be the First to Comment!

Notify of