American’s increased the amount of money they borrowed in the second quarter, with consumer borrowing reaching $13.29 trillion during the quarter ending in June. Reuters, citing a report from the New York Federal Reserve Tuesday (Aug. 14), said that consumer debt during the second quarter was up $454 billion from a year ago, marking the 16th quarter in a row in which consumer debt increased.
“While overall delinquency rates have remained stable at relatively low levels, transition rates into delinquency have fallen noticeably for student loan[s] over the past year, reflecting an improved labor market and increased participation in various income-driven repayment plans,” said Wilbert van der Klaauw, senior vice president at the New York Fed, reported Reuters.
Though the amount of debt increased, that didn’t make it harder for consumers to meet their monthly payments during the second quarter. The loans that are seriously delinquent — 90 days or more past due — were at 2.3 percent in the second quarter, flat with the first quarter of 2018. The number of student loans that are turning seriously delinquent fell to 8.6 percent from 8.9 percent, Reuters noted. Meanwhile, student loan debt hit $1.4 trillion in the second quarter, which is up $61 billion from a year ago.
Automobile debt increased to $1.24 trillion, which is $48 billion more than last year’s second quarter, while credit card debt increased $45 billion to $829 billion. Mortgage debt hit $9 trillion in the second quarter, which is up $308 billion from last year’s second quarter, reported Reuters.
Aiming to help students with their loans, Wells Fargo could offer loans to allow customers to retire their government-backed student debt, said Wells Fargo’s Head of Personal Lending John Rasmussen, according to Bloomberg. The government holds about $1.4 trillion in student loans, representing more than 90 percent of the market.
“We continue to assess the needs of our customers on refinancing of federal loans into private,” Rasmussen said. “We’re sizing what that should look like, how we’d do that in a real customer-focused way.”