U.S. Economic Recovery Slowed by Student-Loan Debt
Career College Central summary:
This year featured yet another political battle over student-loan interest rates. But while Congress resolved that matter, it did nothing about exceptionally high loan burdens, which increasingly are weighing on borrowers and likely putting a drag on the recovery.
Undergraduate borrowers who graduated in 2012 owed, on average, $29,400 in student debt, up a staggering 25% from four years earlier, the nonprofit Institute for College Access & Success said. Americans now owe around $1 trillion in student debt, according to the Federal Reserve Bank of New York. Defaults on those loans are rising.
Nearly 12% of all student debt was delinquent by the end of the third quarter, up from 7.6% five years earlier, according to the New York Fed. The Fed defines delinquent as debt that hasn’t had a payment in at least 90 days. Because that figure includes debt owed by students still enrolled in school and other borrowers who have been allowed to delay payments, the true scope of delinquency is far bigger.
Research by the New York Fed in 2012 indicated more than 1 in 5 borrowers whose loans had come due were delinquent.
Click through for full article: