Federal Reserve Bank of New York: Press Briefing on Household Debt, with Focus on Student Debt — with thanks to Mr. Bryan Alexander for his post on this

 

 

 

 

 

Excerpts:

Student Debt Overview
  • Student debt was $1.3 trillion at the end of 2016, an increase of about 170% from 2006.
  • Aggregate student debt is increasing because:
    • More students are taking out loans
    • Loans are for larger amounts
    • Repayment rates have slowed down
  • About 5% of the borrowers have more than $100,000 debt in 2016, but they account for about 30% of the total debt.
  • Recent graduates with student loans leave school with about $34,000, up nearly 70% from 10 years ago.

 

 

  • While the total level of household debt has nearly returned to the 2008 peak, debt types and borrower profiles have changed.
    • Debt growth is now driven by non-housing sectors, and debt is held by older, more creditworthy borrowers.
  • Student debt has expanded significantly because of higher levels of borrowing and slower rates of repayment.
  • Student debt defaults peaked with the 2011 cohort and have improved somewhat since. However, payment progress has declined.
  • College attendance is associated with significantly higher homeownership rates regardless of debt status. Yet, student debt appears to dampen homeownership rates among those with the same level of education.
  • College attendance appears to mitigate the impact of economic background on homeownership rates.

 

 

 

 

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