December 4, 2020

Student loan debt rises to nearly $1 trillion

Student loan debt has almost quadrupled over the last eight years, according to a survey released by the Federal Reserve Bank of New York.  In 2004, the United States had a combined student loan debt of  $260 billion. Today the debt is almost at $1 trillion.

According to the survey, student loan debt is the only kind of household debt that has continued to grow after the end of the Great Recession in 2009.

The large amounts of debt in which college graduates are burdened may hinder their ability to open other lines of credit in the future, said Donghoon Lee, senior economist for the Federal Reserve Bank of New York.

“The higher burden of student loans and higher delinquencies may affect borrowers’ access to other types of credit and the performance of other debt,” Lee said.

Last December the federal government introduced the Pay as You Earn repayment plan to add to its Income-Based Repayment and Income-Contingent repayment plans, as options for graduates having trouble repaying their debt.

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