According to the American Financial Benefits Center (AFBC), student loan debt continues to be the fastest growing type of consumer debt in the U.S. Student loan debt has increased by 157% since 2007, significantly outsizing other segments of debt such as mortgages, auto loans, and credit card debt.
As average wages remain the same and interest rates continue to rise, this growth in student loan debt is particularly worrisome. These factors combine with the fact that interest rates on all types of student loans are at their highest since 2009. This perfect storm of issues for student borrowers has driven several leaders in the consumer finance realm to express concern that student debt could negatively affect long-term economic growth in the U.S., with the Chairman of the Federal Reserve among them.
These factors have contributed to the rather unsurprising increase in student loan delinquency rates. Delinquency, defined as being late or overdue on regular loan payments for more than 90 days, increased to an all-time high and have remained high since the recession. While other forms of debt had seen significant declines in delinquency rates since 2010, student loan debt delinquency rates have increased by more than 10%.
"Based on this information, there doesn't seem to be an end to the student loan debt crisis close at hand," says Sara Molina, manager at AFBC.