Still Rising: College Loan Debt Now Exceeds Credit Card Debt

By On March 9, 2012 · 4 Comments

I’m doing my part, are you? Compared to credit card debt, it’s a small group of people who are deeply in hock. But a surprising number of college debt holders are past-due. The problem is very concentrated: while 80 percent of Americans have credit card debt, just 15 percent have student debt. The real figures may in fact be far larger than this – consider the number of parents who take out an additional mortgage to pay for college.

A new report by the Federal Reserve Bank of New York finds:

– student loan debt of $870 billion exceeds credit card ($693 billion) and auto ($730 billion) debt. Total outstanding student loan balances grew by 2 percent during the most recent quarter while other forms of debt remained flat;

– the debt will grow: more students are going to college and schools continue to raise prices;

– the average balance is about $23,300, with 40 percent of people under 30 paying off college loans. A small percentage — 3.1 percent — owe more than $100,000. I hope they are doctors;

– 27 percent — one in four! — of borrowers have past-due balances;

– federal and state governments are deeply involved in the complex world of student loans. The report concludes: “there is concern about having enough federal aid to support the large number of students taking up postsecondary education.”

 

 
If you enjoyed this article, please consider sharing it!
Reddit Facebook Twitter Delicious

4 Responses to Still Rising: College Loan Debt Now Exceeds Credit Card Debt

  1. Richard says:
    March 9, 2012 at 9:11 am

    One graph says it all:

    Easy medical insurance and easy educational loans leads to runaway what when there’s no incentive to contain costs?

    http://www1.ctdol.state.ct.us/lmi/EducationChart2.asp

  2. Wilton Businessman says:
    March 9, 2012 at 9:37 am

    So lets see if we can put this together in a logical fashion. In the 80s a certain percentage of people went to college because they could afford it and a middle-class family could afford college.

    Then the Federal government decides that’s not fair, so they start giving money away and having all sorts of loan programs and repayment programs to get more people to college.

    The colleges see that their demand is going up therefore they have to raise prices to build new buildings to house these financed students and edumacate these financed students.

    The Federal government then throws more money at the students so they can afford the higher cost of education which in turn makes the colleges build more and hike tuition.

    Now we get to a point where a middle-class family can’t afford to send their kid to college without taking out a mountain of debt for themselves and the kid ends up with another $23K of debt.

    So the answer is more money?

    Get the Federal government out of the education business and you will see the price of a college education come down.

    The government wants everybody to get a college degree but wants the manufacturing sector to bring us back. In order for that to happen, we need more machinists and factory workers not more lawyers, social workers, and newspaper journalists.

  3. Justthefacts says:
    March 9, 2012 at 3:37 pm

    Virtually every school system in greater Hartford is looking at sharply declining enrollment ten years form now and I’m sure that this trend in similar throughout the country. It will be interesting to see how these bloated universities attempt to tighten their belts when their demand is down 25-30%. There might even be a little competition between schools.

  4. Richard says:
    March 9, 2012 at 4:15 pm

    They will lower standards of course. As long as the money flows easily for financial aid the seats will be full teaching Algebra I if necessary.