A quarterly report on household debt and credit by the Federal Reserve Bank of New York revealed that student loan debt now totals over $1.3 trillion as of December 2016. The report, released in February of 2017, notes the $31 billion increase in outstanding student loan balances.
MarketWatch’s live tracker shows student debt increasing by $2,667.2 per second, based on data stretching back to 2006. According to the Federal Reserve Bank’s data, 10% of the national debt balance comes from student loans, second only to mortgage debt, which is 67% of the pool. Auto loans come in third at 9% of the national debt pool.
In addition to this increase, students are falling behind in debt repayment. At a rate of 11.2%, student loan debt far surpassed the delinquency and default rates of credit card loans (7%) and auto loans (4%). Student loans initially surpassed credit card loans in 2013, in terms of delinquency and default rates, remaining at 11% while credit card rates steadily declined.
According to Make Lemonade, the average student loan debt of a graduate of the class of 2016 in $37,172. The average payment for borrows in the 20 to 30 year old demographic is $351. Between 2005 and 2015, the number of borrowers over the age of 60 with student loan debt rose from 700,000 to 2.8 million.
During his presidential campaign, Donald Trump proposed a plan that put a cap on total repayment for federal student loan holders to about 12.5% of the borrower’s income up to 15 years after graduation. After that, Trump proposed in October 2016, the loan would be forgiven.
“Student should not be asked to pay more on the debt than they can afford,” Trump said at a rally in Columbus, Ohio, “And the debt should not be an albatross around their necks for the rest of their lives.”
The Trump administration could also see the dismantling of the system that makes college graduates eligible for loan forgiveness should they enter into public service fields.