student debt

Consumer Credit Increases By $19.3 Billion

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The Federal Reserve's consumer credit report for September 2016 shows a 6.3% annualized monthly increase in consumer credit, and 7.0% for the entire third quarter.  Revolving credit increased 5.2% for the month as well as Q3,.  Non-revolving credit increased 7.4% for September and 7.6% for Q3.  Consumer credit matters due to personal consumption being the driving force in economic growth.

 

Consumer Credit Rises 5.4% on Student Loans Again for August 2013

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The Federal Reserve's consumer credit report for August 2013 shows a 5.4% annualized monthly increase in consumer credit, driven by student loans.  Once again student loans increased, while credit card debt declined.   Revolving credit declined by -1.2%, and non-revolving credit jumped another 8.0%.  This is the third month in a row revolving credit has declined.

Consumer Credit Report Shows Credit Card Use Down for July 2013

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The Federal Reserve's consumer credit report for July 2013 shows a 4.4% annualized monthly increase in consumer credit, driven by auto loans.  Once again student loans increased, while credit card debt declined.   Revolving credit declined by -2.6%, and non-revolving credit jumped another 7.4%.  June showed consumer credit increasing by a 5.1% annualized rate.

Consumer Credit 7.0% Increase Driven By Student Loans for November 2012

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The Federal Reserve's consumer credit report for November 2012 shows a 7.0% annualized monthly increase in consumer credit, once again driven by student loans. Revolving credit increased by 1.1%, and non-revolving credit jumped another 9.6%. October showed consumer credit increasing by a 6.2% annualized rate.

 

Consumer Credit Increases 5.0% on Student Debt for September 2012

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The Federal Reserve's consumer credit report for September 2012 shows a 5.0% annualized monthly increase in consumer credit, once again driven by student loans. Revolving credit declined, -4.1%, and non-revolving credit increased 9.2 %. For Q3, consumer credit increased 4.0% annualized, with revolving credit declining -1.5% and non-revolving increasing 6.5% for the third quarter.

 

2009 Student Loan Default Rate Jumped to 8.8% from 7.0%

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A sign of the times. Student loans default rates for 2009 increased to 8.8% from 7.0%. For profit schools had the worst jump, from 11.6% to 15%. Private universities and colleges had the lowest, but also increased from 4.0% to 4.6%. Public higher education had a 7.2% default rate, up from 6.0%. These numbers are only for a two year time window. Defaults after that 24 month period are not part of this tally.

From the Department of Education:

The rates announced today represent a snapshot in time, with the FY 2009 cohort consisting of borrowers whose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, and who defaulted before Sept. 30, 2010. More than 3.6 million borrowers from 5,900 schools entered repayment during this window of time, and more than 320,000 defaulted.

Even more horrific these numbers had the new repayment option incorporated where one could scale and cap student loan payments based on their income.

Since the time when the borrowers in the FY 2009 cohort enrolled, the Obama Administration has expanded flexible loan repayment options for borrowers through the income-based repayment plan (IBR). This plan makes loan payments more affordable by capping the monthly payment at an amount based on income and family size.

These numbers are also after another policy change. Schools with high default rates are sanctioned and can lose eligibility for federal student loans. There were actually 5 schools cited in the press release with high default rates:

Student Debt up 25% from a year ago, while 33% of workers below age 35 live with parents

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From the Wall Street Journal:

Students are borrowing dramatically more to pay for college, accelerating a trend that has wide-ranging implications for a generation of young people.

New numbers from the U.S. Education Department show that federal student-loan disbursements—the total amount borrowed by students and received by schools—in the 2008-09 academic year grew about 25% over the previous year, to $75.1 billion. The amount of money students borrow has long been on the rise. But last year far surpassed past increases, which ranged from as low as 1.7% in the 1998-99 school year to almost 17% in 1994-95, according to figures used in President Barack Obama's proposed 2010 budget.