The amount of outstanding student debt in America defies gravity

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The number of people who have taken out student loans in the U.S. has doubled in the past decade, and delinquencies are climbing again, according to new data from the New York Federal Reserve.

Between 2004 and 2014, there was a 74-percent increase in average balances, and a 92 percent increase in the total number of borrowers, to 43 million.


There is now close to $1.2 trillion in student debt outstanding in America.

Four percent of borrowers, about 1.8 million Americans, now owe more than $100,000 on their student loans. Approximately 344,000 borrowers owe at least $200,000.


For Q4 2014, 11.3% of aggregate student loan debt was 90-or-more days delinquent or in default, up from 11.1% in the third quarter. Delinquencies started increasing again in 2014 after declining in 2013, and remain well above pre-recession levels, even as all other forms of debt have seen steady decreases in delinquencies during the period.


“Although we’ve seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student loan balances and delinquencies is concerning,” said Donghoon Lee, research officer at the Federal Reserve Bank of New York. “Student loan delinquencies and repayment problems appear to be reducing borrowers’ ability to form their own households.”

They average balance per borrower is about $27,000, and the median balance is about $14,000.


The Fed says the basic reason for the elevated defaults is that student debt is not dischargeable in bankruptcy like other types of debt. “thus, delinquent or defaulted student loans can stagnate on borrowers’ credit reports, creating an ever-increasing pool of delinquent debt,” it says.

Of course, that’s only the immediate reason. The Fed is rolling out a series of blog posts this week on student debt where it will delve further into these increasing rates.


Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.

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