College graduates from the last decade or so are not alone in carry large student loan debt, according to a new report from the Federal Reserve Bank of New York. People over the age of 40 carry one-third of all student loan debt while 30-somethings average $28,500.
The study reveals a staggering number. $870 billion. That’s the outstanding debt from student loans among Americans, far outpacing credit card debt (at less than $700 billion) and the auto loan industry (at $730 billion). Most people expect college tuition to continue its rapid increase while even more people try to obtain an undergraduate degree or go back to school to begin a new career.
More than one out of every nine people with student loan debt carries a burden of $50,000 or more. Meaning at least four million people have the equivalent of a high end car (or even more than two) loan.
The study authors note that a full 27% of borrowers that are currently in repayment have a past due balance. This does not include current students.
In sum, student loan debt is not just a concern for the young. Parents and the federal government shoulder a substantial part of the postsecondary education bill. Moreover, the student loan delinquency picture is not fully captured in the broad statistics since a significant proportion of borrowers and balances are not yet in the repayment cycle.
It is not just young students or recent graduates being burdened by the debt load. People over 60 have more than four percent of the student loan debt. Parents are also having to take out more loans for their children’s education. A report by FinAid.org showed parental debt load more than doubling over the last decade and topping $100 billion. They average out at roughly $34,000 — tough amount to pay back prior to retirement.
The study was conducted for the Federal Reserve of New York and used credit reports from Equifax to calculate the statistics and draw their conclusions.
Photo by Aaron Krager