Student Loan Debt and Delinquencies Grow

Default rates continue to rise, leaving younger borrowers with greater debt

Student Loan Debt and Delinquencies Grow
March 9, 2016

Since the recession in the late 2000s, student loan debt has continued to increase. A report issued by two professionals from the St. Louis Federal Reserve Center for Household Financial Stability outlines the dangers of this growing debt.

During the recession, borrowers began to focus on getting out of debt or, at least, to not incur any new debt. Household income growth levels, which were at an annualized rate of almost 10 percent prior to the recession, dropped. While they may no longer be plummeting as they were during the financial crisis, growth rates now stand at below one percent. This means that even those who are looking at borrowing money once again have much less income with which to pay it back.

Most of the new debt that consumers have been accruing since 2012 is in student or auto loans – in fact, all other debt makes up only about 10 percent of all loans. However, most auto loans have returned to what they were in the early 2000s, leaving most people with debt that they can manage. Student loan debt, on the other hand, has greatly increased. The average student loan debt has increased by almost 58 percent since 2003 to an average of $25,000 per graduate.

With lower growth rates, however, more borrowers are becoming delinquent on their student loans – almost 11 percent are now 90 or more days overdue. With this debt, younger borrowers can no longer easily buy a house or begin retirement savings, leaving them at a major disadvantage.

Find out quickly at what rate you can refinance your student loan.

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Steffanie | 03.09.16 @ 18:01
I am not surprised it is growing. The cost of college is ridiculous. We are encouraging our kids to find different routes for schooling.
Elaine | 03.09.16 @ 18:02
Quilty! Our student loan is at an I reachable about for us. We feel like we are drowning most time. Having faith we will get out from under it
Erin | 03.09.16 @ 18:02
If we can't help people get the education they need to be competitive in this world without being in massive quantities of debt, it hurts the entire country, not just those individuals. This is sad, but unsurprising news.
Alec | 03.09.16 @ 18:03
While we don't owe student loans due to my husband getting his education via the military and we own our truck, we are unable to make payments in to retirement savings right now too. The job market where we live just isn't strong enough to support many entry level people. It's going to have to pick up or we are going to have to move to be able to pay back debt and start saving for our future.
trish | 03.09.16 @ 18:03
When I met my husband, he never mentioned his student loan. Right before we were married, I discovered it! I am not surprised by the growth of college loans due to the high cost of education. But knowing how bad his interest payment was, I can only imagine how much it is now!
Carla | 03.09.16 @ 18:04
I wish the cost of a college education could be reduced instead of rising every year. It is no wonder young people are discouraged from seeking further education.
irene | 03.09.16 @ 18:05
It's not surprising, so many borrow more than they can afford to pay back, at least before they manage to land a decent paying job.
Jo Ann | 03.09.16 @ 18:06
Sad that one must be saddled with debt after going to college. That is why wages must go up just so these people can afford their student debt, and be able to make a decent living.
gracie | 03.09.16 @ 18:07
It's going to going to keep growing as cost keeps growing and there are not as many higher paying jobs out there to keep up with the graduates
Heather | 03.09.16 @ 18:07
Something needs to be done about the cost of higher education. Its beyond ridiculous. All these young adults are starting off life with so much debt they can never get ahead.
Sara | 03.09.16 @ 18:07
The cost of college is crazy. You know we encourage our kids to go to college but man its hard to pay for.
$commenter.renderDisplayableName() | 05.17.21 @ 23:09