Growing Student Debt Balance

Student debt as a percentage of all consumer debt, ex-mortgages, has increased threefold since 2003 and currently sits at 32.5%. Wage growth for those with college degrees segment has remained relatively flat after dipping slightly post-recession, suggesting diminishing returns on investment. Although wage growth has been below 5% since 2003, it has been above the year-over-year growth of the consumer price index and shown less volatility.

As of March 31, 2016, student loan debt was approximately $1.3 trillion, up $72 billion from the prior year. Total consumer debt, ex-mortgages, stood at $3.9 trillion at the end of March 2016.

Student debt will typically move counter-cyclical to markets and other debt categories that would normally decrease in times of economic stress as decreased job prospects push more individuals back to the classroom. Another factor is the ever increasing cost of higher education, requiring more borrowing and borrowing by students who may not have needed loans at past tuition levels.

Recommended for You
U.S. private equity fundraising expected to drop significantly — PitchBook
U.S. private equity fundraising expected to drop significantly — PitchBook
Gold returns top equities, bonds last year
Gold returns top equities, bonds last year
Asset-based finance expected to drive private credit growth — Fitch Ratings
Asset-based finance expected to drive private credit growth — Fitch Ratings