Student Loan Debt Reaches $1 Trillion
Consumer finance officials say the student loan debt is “too big to fail.”
The latest threat to the economic recovery: soaring student loan debt.
Officials at the Consumer Financial Protection Bureau—the government agency formed last July to educate and protect consumers in the wake of the recent financial crisis—found that there is $1 trillion in outstanding student loan debt in the U.S.
The announcement—made via a blog post on the agency website—aggregated private student loans and outstanding debt in the federal student loan program.
Excessive debt can be an obstacle for a recovering economy, especially for the housing market, the report says.
Officials said one of the most sobering findings was that in spite of the drastic debt, student borrowing continues to steadily increase. Students borrowed $117 billion in federal students loans last year. When combined with private student loans—which do not offer income-based repayment or deferment options—the current trend could cause severe consequences not just for a struggling generation, but for the entire economy.–John McDermott
Photo via Ian Wescott.