US student debt remains impervious to the forces of deleveraging.
The latest official numbers from the Federal Reserve peg the total amount of outstanding US student debt at $1.18 trillion as of the end of the second quarter.
While most Americans have worked to cut down on debt after the Great Recession—either by paying it off, defaulting on it or declining to borrow as much as they used to—student debt has continued to climb.
Since the end of 2008, the amount of US student debt outstanding has surged 61%. Over the same period, the largest component of US consumer borrowing—home mortgage debt—has shrunk 11.3%.
The supercharged growth of student debt—and the recent uptick in delinquencies that we saw over the last couple years—has caused a lot of people to worry that student debt is the next debt bubble to burst. But we’re not that worried. Delinquency stats on student debt are improving along with the US economy. That makes sense. Grads with jobs have an easier time paying back loans.