J.D. Tuccille flags a report from the Dallas Fed, showing that America’s student loan delinquency rates are still high, even as we get other forms of household debt under control:
Unshockingly, while defaults decline for credit card debt, mortgages and auto loans, they’re on the rise for student loans. “At 10.9 percent, the second quarter 2014 delinquency rate on student loans was more than three times that of mortgages and auto loans, and more than 3 percentage points higher than the rate of serious delinquencies on credit cards.” Apparently, young grads with overpriced sheepskins and no decent jobs in the offing have trouble meeting the tab.
8% fewer homes will transact than normal in 2014, purely due to student debt. … Our conclusion is that 414,000 transactions will be lost in 2014 due to student debt. At a typical price of $200,000, that is $83 billion per year in lost volume.
Meanwhile, an analysis from Pew shows that more students of every class background are graduating college in debt today than 20 years ago:
In the early ’90s, only among graduates from low-income families did a majority of graduates finish college with student debt. Now, solid majorities of graduates from middle-income families (both lower-middle and upper-middle) finish with debt, and half of students from the most affluent quartile of families do the same. … Among recent college graduates who borrowed, the typical amount of cumulative student debt for their undergraduate education increased from $12,434 for the class of 1992-93 to $26,885 for the class of 2011-12 (figures adjusted for inflation). The increase in the median amount of debt by newly minted borrowers between the class of 1992-93 and the 2011-12 varied somewhat by the graduates’ economic circumstances. But regardless of family income, the typical amount owed at graduation increased about twofold over this time period.