A new report out this week from the Federal Reserve Bank of New York reiterates the super-depressing figures that we already know, which you should dwell on, constantly, particularly if you are a college graduate with dim job prospects: as of the third quarter of 2011, total student loan debt stood at $870 billion, a number significantly larger than all of our credit card debt or auto loan debt. ("This balance is expected to continue its upward trend." FYI, loan sharks.) Each of the 37 million Americans with student loan debt owes an average of $23,300. Though some owe more.
The new info here is that the FRBNY has taken a whack at calculating the true rate of delinquency of student loans, by screening out certain groups that throw off the numbers. Previously, about 14% of borrowers officially had past due loans. Surprise! The number is actually much higher:
We find that 27 percent of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that is delinquent is 21 percent-much higher than the unadjusted rates of 14.4 percent and 10 percent, respectively
So more than one in four borrowers are effectively behind on their student loan payments, and more than one fifth of total student loan debt is effectively delinquent. Fortunately, education is priceless.