Americans owe more on their student loans than on their credit cards or car loans, according to a new report from the Federal Reserve Bank of New York.
Student loan debt stands at $870 billion nationally, surpassing the nation’s outstanding balance on auto loans ($730 billion) and credit cards ($693 billion), according to Grading Student Loans, which is not a formal report so much as a scholarly blog post published by the economists at the New York Fed.
It comes at a time of heightened awareness of the student debt crunch. Last fall, President Obama took executive action to cap monthly loan payments at 10 percent of discretionary income, down from 15 percent previously. Obama has challenged colleges to help students manage their debt by keeping costs down.
One-third of the national student-loan balance is held by people ages 30 to 39, and another third by people older than that, signifying that only a small share of college graduates manage to retire their loan debt while still in their 20s.
I will present the report’s other key findings in bullet form, to make for easy reading:
• Student loan debt is rising at a time when other debt is flat or even declining. From the second to the third quarter of 2011, the nation’s loan balance grew 2.1 percent, from $852 billion to $870 billion.
• Fifteen percent of all Americans with enough of an economic pulse to have credit reports have outstanding student-loan debt. Two-fifths of people under 30 have loan debt, and 25 percent of those between 30 and 39.
• $85 billion in student loan debt is “past due,” and of that total, three-quarters is owed by people over 30. More than five million borrowers have past-due student loans.