Student Loan Debt Continues To Rise

Student loan debt is steadily marching toward $1 trillion, according to figures released Wednesday.

The New York Federal Reserve Bank said that student loan debt rose to $956 billion in this year’s third quarter, an increase of more than 4 percent.

In all, Americans hold $2.7 trillion in debt outside of real estate holdings, the New York Fed said, as both credit card and car loan debt also increased between July and September.

But the Fed also found that consumer’s total debt dropped slightly in the third quarter, in part because of a decrease in mortgage debt. That drop came even as people in the U.S. were obtaining more mortgages.

Donghoon Lee, a New York Fed senior economist, said those figures are a sign of increased consumer confidence, after years in which the housing market was in the doldrums.

“The increase in mortgage originations, auto loans and credit card balances suggests that consumers are slowly gaining confidence in their financial position,” Lee said in a statement.

“As consumers feel more comfortable, they may start to make purchases that were previously delayed.” 

The New York Fed’s figures on student loan debt still lag behind numbers from the Consumer Financial Protection Bureau, which earlier this year found more than $1 trillion in outstanding student loan debt.

According to the Fed’s numbers, $23 billion of the new student loan debt came from new loans.

The figures on student loans comes months after Republicans and Democrats agreed to extend lower interest rates on student loans for a year, after weeks of sparring over how to pay for it.


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