Households Cut Overall Debt, But Student Loans Jump

May 14, 2013
Wall Street Journal  
student loan news

U.S. households lowered their debt loads during the year's first quarter, although student loan borrowing continued to climb, according to a report from the Federal Reserve Bank of New York. Total indebtedness fell by 1 percent from the previous quarter to $11.23 trillion. Total mortgage debt was down to $7.93 trillion, from $8.03 trillion in the three months prior; while credit card balances fell by $19 billion to $660 billion. Auto loans, however, were up by $11 billion; and student loan borrowing snowballed by a staggering $20 billion. Student loan debt is of particular concern, with a nationwide delinquency rate that is approaching 12 percent. The New York Fed identifies West Virginia as having the highest delinquency rate -- 18 percent -- and South Dakota has having the lowest -- 6.5 percent. The national average for student loan debt is $24,810, according to the report, and the highest share of borrowers carrying this debt is found in Washington, D.C. However, the New York Fed emphasized, student loan indebtedness has reached "significant" levels in all states.
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