According to the latest report from the Federal Reserve’s Board of Governors, consumer credit outstanding grew about 4.5% in the second quarter of 2018 to another record. Total consumer debt now sits at $3.91 trillion, which is nearly 50% higher than the previous credit-cycle peak of $2.67 trillion in the summer of 2008. Second, only to mortgage debt, student loan debt is now $1.53 trillion and is higher than both auto loans and credit cards. 1
Student loans jumped to a new all-time high
Student loans surged to a new all-time high of $1.53 trillion. This level of debt is a new record for the second quarter, and second only to the fourth quarter of last year – which tends to see a seasonal spike due to holiday spending.
According to Make Lemonade, “there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone. The average student in the Class of 2016 has $37,172 in student loan debt.”2
The Student Loan Reaches Across Age Groups
The latest student loan debt statistics for 2018 show how serious the student loan debt crisis has become – for borrowers across all demographics and age groups. This trend can’t go on forever. Sooner or later, this boom will turn to bust, as they always do. A considerable amount of this debt will go bad, and another crisis will likely follow.
Borrowers Need to be Cautious
Of course, what is far less sure is when. It’s incredibly difficult to predict the timing of these events. And while there are plenty of reasons to be cautious today, most measures of credit-market stress remain relatively low to date.
If you are a student loan borrower, my future blog posts will provide you with the information that can help you make more informed decisions regarding student loan refinance, student loan consolidation, student loan repayment, and student loan forgiveness.
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