This week, everyone's buzzing about the claim that student loans taken out this year will exceed $1 billion, pushing outstanding student loans past the $1 trillion mark sometime this year for the first time.
USA Today laid out a depressing picture of student loan debt in a Wednesday story, citing data from the Federal Reserve Bank of New York's latest report on Household Debt and Credit and the College Board.
If you haven't yet experienced the stomach-churning, visceral dread that should come with an understanding of what these figures could really mean, consider this: outstanding student loans and credit card debt are now about equal, according to the data, but, unlike credit card debt, student loan debt survives bankruptcy.
Now go take an antacid.
OK, you're back. Also among the data, according to USA Today:
* Full-time undergrads borrowed an average of $4,963 in 2010, 63 percent more than students borrowed a decade earlier after adjusting for inflation.
* The percentage of student loan borrowers more than nine months behind on payments rose from 6.7 percent in 2007 to 8.8 percent in 2009.
Local
Washington, D.C., Maryland and Virginia local news, events and information
USA Today spoke to several student loan analysts and observers about the findings' implications:
"Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children," said Mark Kantrowitz, publisher of FinAid.org.
Reuters' Felix Salmon disputed USA Today's numbers after they went viral and offered his own analysis.
"The most recent figures show total credit-card debt at $690 billion, and total student-loan debt at $550 billion...The stock of student loans outstanding continues to increase at a pretty much the same pace it’s been rising at for the past six or seven years... And of course it’s also much harder to discharge than mortgage or credit-card debt. It’s a problem, I think. But it’s not a trillion-dollar problem..."
Sources outside of the Fed back up USA Today's $1 trillion figure, notes the Washington Post.
Whether or not the balance will hit $1 trillion this year or student loan debt is really greater than credit card debt, graduates do find themselves in an unsustainable situation.
What do you think?
