Student debt in arrears has hit record highs as measured by data gleaned from the Federal Reserve Bank of New York, Bloomberg reports.
The newswire said on Monday (Feb. 18) that per the Fed’s quarterly household debt report, the third and fourth quarters of last year showed consecutive records, at respective tallies of $166.3 billion and $166.4 billion.
The delinquencies are measured at least 90 days past due or in default.
The loans that are at least 90 days past due are the ones that are considered in “serious delinquency.” In terms of demographics, the age group that is a growing presence in this category includes 40-year-old to 49-year-old borrowers, who are the parents borrowing to pay students’ education expenses.
Measured as a percentage, the delinquent debt has remained steady at about 11 percent for the past six and a half years. The total amount of debt outstanding had come to $1.5 trillion by the end of last year.
As has been reported, costs tied to higher education have doubled through the past 20 years. The College Board has estimated that in-state tuition at public four-year institutions of higher learning have gained an average 3.1 percent annually across the last 10 years.
The affordability question has been such that the Federal Reserve Bank of St. Louis asked the question via blog entry: “Is College Still Worth It?” The bank noted that “in terms of wealth accumulation, college is not paying off for recent college graduates on average – at least, not yet.”
In other news affecting student loans, as reported late last week, Senator Lamar Alexander (R-TN) — chairman of the Senate Committee on Health, Education, Labor and Pensions — has offered up an overhaul with two student loan repayment routes. In one scenario, borrowers’ monthly bills are capped at 10 percent of their discretionary income, and in a second scenario, payments would be spread over a decade. Employers would deduct the funds from their employees’ paychecks, which in turn would be sent to the government.