Consumers are pulling back on their debt, except in one noticeable, troubling area.

The Federal Reserve Bank of New York says that overall consumer debt dropped about $60 billion, to $11.66 trillion, in the third quarter. But as consumers cut their mortgage and credit card debt, they apparently were loading up on student loans.

Really loading up. The New York Fed said it has been underestimating the amount of student-loan debt. Revised figures for the second and third quarter show a significant uptick.

In its August report, the New York Fed reported student loans outstanding at $550 billion. Its revised figure shows that in the second quarter, the amount outstanding was actually $845 billion — 53.7 percent higher than what was first reported. In the third quarter, total student-loan debt was $865 billion. These figures dwarf credit card debt, which was $694 billion in the second quarter and $693 billion in the third.

“We came to realize that our aggregate reported student loan balance was at the low end of the substantial range of publicly available sources,” the New York Fed report said.

The new data for student-loan balances incorporate additional accounts that had been unintentionally excluded. The bank only has data using the revised methodology for the two most recent quarters, but it is working with its vendor to make revisions to earlier figures.

The New York Fed report is only the latest to reach a certain conclusion: Student-loan debt is reaching incredible heights. Last year, total student-loan debt passed total credit card debt for the first time.

Mark Kantrowitz, publisher of FinAid (, one of the best sites for college financial aid information, has created a Student Loan Debt Clock at
. The clock is an estimate of current student-loan debt outstanding, including both federal and private student loans. My last check showed more than $960 billion.

Here’s what concerns me: All the estimates point to a disturbing milestone. If families continue the current borrowing trend, total student-loan debt will soon reach $1 trillion.

Two-thirds of college seniors graduated with loans in 2010, and they owed an average of $25,250, up 5 percent from the previous year, according to a recent report from the Project on Student Debt at the Institute for College Access and Success. Graduates in 2010 had this debt at the same time they were facing a nationwide unemployment rate of about 9.5 percent.

And if that weren’t bad enough, the Education Department reported that for fiscal year 2009, the national student-loan default rate increased to 8.8 percent, up from 7 percent in 2008.

At least there are more tools to help families before they take on college loans. Colleges are required to post net price calculators on their Web sites, enabling you to determine what your student will pay after subtracting grant aid from the sticker price. You may have to have a lot of patience to find the calculators, which are often buried on a site. But try nonetheless.

The Consumer Financial Protection Bureau has a Student Debt Repayment Assistant tool on its Web site. Answer a few questions and get options that include the federal income-based repayment program, which ties your payment to your income and family size. The Student Debt Repayment Assistant is available at

On the page with his debt clock, Kantrowitz offers a number of tips to minimize the amount of debt you or your child will accumulate. For example, he says if you must borrow (and I would suggest you do everything you can to avoid it), then at least see if you qualify for federal loans. They are cheaper and have better repayment options than private student loans. Unsubsidized Stafford and PLUS loans are available without regard to financial need. He also reminds families, no matter your income, to submit the Free Application for Federal Student Aid (FAFSA) at

Coincidentally, as I was writing this column, I received an e-mail from a reader who wrote: “We cosigned some student loans for our granddaughter. We have been trying to get the monthly payment reduced with no luck. We are up to date on our monthly payments. We are also retired and living on a fixed income. Any help would be great.”

There wasn’t much help I could give this couple. Their story is a warning that once you take on student-loan debt, it’s hard to get out.

Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or singletarym@
. Personal responses may not be possible. Please also note that comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.