Even as Americans whittle down other forms of debt, students continue to pile on loans to pay for college and graduate school.
Total student debt rose more than 3% to $904 billion in the first quarter, continuing a trend in which outstanding educational loans have surged by $663 billion since 2003, according to a report from the Federal Reserve Bank of New York.
The rise in student debt contrasted with a decline in overall indebtedness among American consumers. Total household debt declined $100 billion, or 0.9%, to $11.4 trillion, according to the New York Fed.
Household debt is down $1.5 trillion since its peak in the third quarter of 2008. Student debt has risen by $293 billion in that time.
"Student loan debt continues to grow even as consumers reduce mortgage debt and credit card balances," said Donghoon Lee, a senior economist at the New York Fed. "It remains the only form of consumer debt to substantially increase since the peak of household debt in late 2008."
Rising student loan debt is a trend which will continue for the foreseeable future. Even though the problem is finally starting to be talked about, there have so far been absolutely no reforms which would cause the trend to reverse, and the people talking about the student loan problem are just a few bloggers and journalists, and not politicians who have the power to actually effect changes.
Despite the grumblings (which are increasing), the message from politicians remains the same: everyone must go to college, and the government must loan money to students otherwise it’s unfair to poor students who otherwise wouldn’t be able to afford education, which we just defined as a necessity. Total student loan debt will probably double to $2 trillion before the official message changes.