Student loan debt reached an all-time high and delinquency rates continued to rise last year, according to a new report from the Federal Reserve Bank of New York found.
Bloomberg reports that data [PDF] from the New York Fed shows student loan debt increased $31 billion last quarter, bringing the total student debt to $1.16 trillion – a 7.1% increase over debt in 2013.
The $31 billion increase brings the total 12-month increase for 2014 to more than $77 billion.
According to the New York Fed, 11.3% of student loans were delinquent (90 days past due) in the final three months of 2014, up from 11.1% in the first three quarters of the year.
The Associated Press reports such high delinquency rate translates to one in nine student loans being past due.
Officials with the New York Fed say that while the level of delinquencies already appears high, it’s likely understated.
About half of all student loans are in deferment, in grace periods or in forbearance, temporarily removing them from the repayment cycle.
Although delinquency rates have decreased from the record 11.8% in 2013, they remain about 6% higher than a decade ago, the New York Fed reports.
“Although we’ve seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student-loan balances and delinquencies is concerning,” Donghoon Lee, research officer at the New York Fed, said in a statement.
As previous studies have found, the New York Fed report reiterates findings that high student loan debt and delinquencies appear to be “reducing borrowers’ ability to form their own households.”
Student-Loan Delinquencies Rise in U.S. [Bloomberg]
1 in 9 student loans past due, limiting ability to buy homes, NY Fed says [The Associated Press]
by Ashlee Kieler via Consumerist
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