Shocking Facts About Student Loan Debt Mar07

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Shocking Facts About Student Loan Debt

A good education can make dreams come true, but for millions of Americans, paying for that education has become a nightmare.

A new analysis from the Federal Reserve Bank of New York gives startling details on the rising levels of student loan debt in the U.S. Altogether, the report finds that Americans had a total of about $870 billion in student loan debt in the third quarter of 2011. Spread out over every American, that’s nearly $2,800 per person.

The report, based on analysis of data on 241 million Americans from credit reporting agency Equifax, adds to a growing list of troubling indicators about the cost of higher education. Here are some startling figures that illustrate the growing spectre of student debt:

It’s Bigger Than Plastic

Outstanding student loan balance now stands at about $870 billion, and has surpassed the nation’s $693 billion credit card balance, according to the report. According to recent data, nearly 80 percent of Americans held credit cards as of 2008, compared to the 15 percent of consumers who now hold student debt, according to the Fed report. That contrast illustrates just how small of a pool of Americans holds this large chunk of debt.

…But with Tougher Repayment

According to one calculation, delinquency rates on student loan debt are nearly twice that of other household debt.

The New York Fed report estimates that past-due student loan balances equal $85 billion, or around 10 percent of the total national student loan debt burden. At first blush, that is roughly equal to the average delinquency rate on other debt, including mortgages, credit cards and auto loans.

However, many student loan borrowers are not in repayment status for a variety of reasons, like being current students. Not counting these people, the report estimates that 21 percent of the total student loan debt burden in the U.S. is delinquent, and that more than one-in-four of the 37 million student loan borrowers represented in the Equifax data have past due balances.

via 5 Shocking Facts About Student Loan Debt: It has surpassed credit card debt and has twice the delinquency rate – chicagotribune.com.

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