Debt accumulated by college students in the United States has reached $1.2 trillion – more than all the credit card debt of all Americans.
The numbers come from a new study by the Consumer Financial Protection Bureau. At this level, college debt has increased 20% since December 2011, while credit card debt – which now stands at $847.1 billion – increased only 2% over the same time period.
Student loans are now the largest area of debt in America, behind only home mortgages.
In a statement after the numbers were released, Jen Mishory, deputy director of Young Invincibles, a group that represents Americans under 35, said that $1.2 trillion “is just too much.”
“Our leaders in Washington must come together to tackle the problem of college affordability and unmanageable student loan debt,”Mishory said. “We need to take action on the federal interest rate increase right now, but there is a crisis-level problem to fix beyond that.”
The new figure is expected to put even more pressure on the U.S. Congress to deal with the recent rise in student loan interest rates, which doubled to 6.8% on July 1. The student debt from federal loans alone stands at about $1 trillion, according to the report.
“I think there’s been a lot of attention about future student loan interest rates but student loan debt continues to grow,” Rohit Chopra, the Consumer Financial Protection Bureau’s student loan ombudsman, told Politico.
However, those who currently have student loans are not affected by the rate change. The new, higher rate will only apply to loans issued after July 1.
About 25% of American with some college experience but no degree have student loan debt, according to a report from the Urban Institute.
In May, Bloomberg reported that the Federal Reserve Board of Governors had said the increase in student loan debt has some parallels to the housing crisis. Particularly, there are so many loans being offered to so many different people that an increase in defaults seems inevitable.
The good news for those thinking of attending college that the high numbers are causing members of Congress and the Obama Administration to put more focus on addressing student loan debt. While it’s all talk at this point, Congress is getting nearer to working out a deal on the student loan rate.
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