The Fed of New York's latest snapshot shows the total amount of U.S. student debt continuing to grow. Delinquencies in this space are also increasing faster than mortgages, auto loans, and credit cards. These trends may affect the country's ongoing investment and consumption as well as the average consumer's ability to borrow.
Its latest snapshot on borrowing shows that even though Americans have been working on shoring up their finances over the past few years, more people are falling behind on their student loans. The rate of delinquency and its impact on the US economy has reached a “concerning” level, according to Fed economists. Until 2009, student loans in the US made up the smallest proportion of Americans’ household debt. That changed when Americans paid down their home and car loans during the recession but continued to borrow for school, even as tuition costs continued to rise. Just five years later, the $1.2 trillion in Americans’ outstanding student debt is higher than all other types of non-mortgage debt (mortgage debt, at $8.2 trillion, remains 69% of Americans’ total borrowing).