Over $1 trillion.
This is the staggering amount Americans owe on student loans, according to officials at the Consumer Financial Protection Bureau, who announced this preliminary figure from a study to be released this summer.
The “sobering” $1 trillion figure is higher than the country’s credit card debt, and was probably reached several months ago, said Rohit Chopra, the CFPB’s student loan ombudsman in a website post that was excerpted from a speech he made at a banking conference in Austin, Texas.
More young people, wary of entering a weak job market, have opted for college. But colleges hiked tuition by 6.5 percent last year, and these higher tuitions have forced students to take out larger loans. “Federal student-loan debt isn’t growing just with new originations,” Chopra said. “With so many borrowers unable to keep up with interest payments, debt is growing even more many who have left school.”
Students borrowed $117 billion in just federal student loans last year. They also continued to borrow private student loans. They face a myriad of financial challenges, Chopra noted. “The lines of job-seekers are long, states are reducing their higher education budgets, and household budgets are straining. Too much debt means too much risk for a generation of young people, many of whom are struggling in today’s economy.
“Young consumers are shouldering much of the punishment in the form of substantial student loan bills for doing exactly what they were told would be the key to a better life. Large levels of debt might also pose immediate problems for the rest of us.”
These problems include an even slower recovery of the housing market. Instead of getting married and becoming first-time homebuyers, Chopra said, “student loan borrowers are sending big payments every month to their loan servicers.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.