What We Owe
Tick. Tick. Tick. That is the sound of the potential debt bomb ticking inside American households. At the end of last year, Americans between the ages of 18 to 29 amassed over $1 trillion dollars in debt. Nearly 40% of it was student loan debt. That is the highest for that age group since 2007.
The graphic below shows the major category of total debt (regardless of age) is mortgage debt. Student loan debt is now the second largest component at nearly $1.5 trillion (almost 11% of total debt). What the graphic does not show is that student loan debt has increased by 102% since 2009 (the comparable rate for mortgages is 3.2%).
The numbers in red are the average delinquency rate. Student loans have an average delinquency rate of 11.3% — the highest of any category. The next highest delinquency rate is credit card debt at 7.8%.
Unlike other forms of debt, student loan debt is generally not dischargeable in a bankruptcy. The economic implications are significant.