Student debt swells, federal loans now top a trillion

By Rohit Chopra. While there has been considerable attention by policymakers on federal student loan interest rates taken out for the 2013-2014 academic year, outstanding student loan debt owed by existing borrowers continues to swell. The Consumer Financial Protection Bureau estimates that outstanding debt is approaching $1.2 trillion as of May 2013. We also estimate that student loans guaranteed or held by the federal government have now crossed the $1 trillion mark. Last year, the Bureau released findings based on our research on the student loan market, revealing that total outstanding student loans were approximately $1 trillion as of the end of 2011. The 20% growth in student loan debt from the end of 2011 to May 2013 has been much faster than growth in revolving credit products (predominantly credit cards), which increased from $843 billion to $857 billion – an increase of less than 2%. Student loans now comprise the second largest form of consumer debt behind home mortgages. Read more...