Student Loan Debt Continues to Increase
According to the Federal Reserve Bank of New York, outstanding student loan debt rose 3.4% to $904 billion in the first quarter. This is up from $874 billion in the previous quarter. Student loan debt has continued to soar through the "Great Recession" and the years following, even as other forms of debt (mortgage debt, revolving debt, etc) have decreased.
According to the NY Fed, outstanding student loan debt increased $64 billion in the year ended March 31st, while all other forms of household debt fell $383 billion.
The NY Fed also noted that student loan debt "remains the only form of consumer debt to substantially increase since the peak of household debt in late 2008."
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A number of factors have resulted in student loan debt continuing to increase over the past five years, including:
-tuition increases at many universities and colleges (reduction in state appropriations across the country one of the leading factors)
-much higher competition for summer jobs due to high national unemployment rate (many experienced workers are now competing for the same jobs that used to be the domain of students, including positions at fast food restaurants and retail sales jobs)
-less assistance from parents as many US households are still struggling to make ends meet
-many students are electing to remain in school for a longer period of time (advanced degrees, second degrees, etc) thanks to a still-weak job market
-increased food and gas costs require students to raise even more money to attend school
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Thanks to increased debt levels, many graduating students are moving in with Mom and Dad after graduation to save money.
Source: Businessweek.com - Student-Loan Debt Rose to $904B in Q1
Filed under: General Knowledge
