About 51 percent of borrowers with student loans made directly by the U.S. Department of Education have fallen behind or are not making expected payments, according to data released on Aug. 8. Of an estimated $300 billion in Direct Loans now in repayment, about 17.2 percent are at least 31 days delinquent. By comparison, the Federal Reserve reports that only 3.3 percent of all loans and leases held by U.S. banks are at least 30 days late.
Policymakers and analysts are debating whether the nation's $1.3 trillion in unpaid student debt is a risk to economic growth and the federal budget. Congress is preparing to reauthorize the nearly 50-year-old Higher Education Act, which governs how taxpayer dollars are allocated toward student borrowers and higher education.
Not all data on student loan debt had been shared among all government agencies. Officials at the Treasury and Federal Reserve did not have access to the data, forcing them to use information from consumer credit reports. The New York Fed’s estimate of total student debt does not match those of the Consumer Financial Protection Bureau or the Fed’s Board of Governors in Washington. Without reliable figures, researchers and policymakers have used more questionable sources -- such as surveys -- to form conclusions about whether student debt may damage household finances and the economy.