As mentioned last night, is getting a high priced education worth it? Since GFC student debt has exploded.
Student loan debt increased significantly over the past few years, almost tripling from half a trillion dollars in 2007 to nearly $1.3 trillion today.
From 2005 to 2012, the number of borrowers increased from 24.3 million to 37.5 million (a 54 percent increase) and average debt per borrower increased from $16,000 to $25,000 (a 56 percent increase). Latest data suggests student delinquent debt has surged from 9% in 2013 to 11% in 2016. The Eighth District includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee has student loan delinquencies climbing from 9% to 14% over the same period. .
From the Spring 2013 report at the Fed:
“The delinquency rate on student loans has surged in recent months. Given that the number of student loans and the overall amount of student loan debt have ballooned in recent years, student loans represent a potentially severe problem for the United States. Because the vast majority of these loans are backed by the U.S. government, they represent a huge potential liability for U.S. taxpayers. As household incomes continue to stagnate and education costs continue to greatly outpace inflation, the amount of student loan debt will likely only increase. With…a weak labor market, it is likely that the delinquency rate on student loans will also continue to increase. In the absence of a strong economy, students, particularly those with heavy student loan debt, are more likely to delay the purchase of a home or car and family formation, thus reducing overall consumption growth in the U.S. economy. While the overall impact of such a shift is difficult to determine, it’s likely that another economic shock to the U.S. economy would further increase the delinquency rates on student debt nationwide.”