Photo: Flickr via seanmcgrath
For months, regulatory agencies have been throwing around all sorts of estimates on the size of the student debt bubble.The firmest figure so far has been $865 billion–listed in this CFPB report in January–but the general consensus has been that it’s well on the way to hitting the trillion-dollar mark.
It turns out everyone was way off.
Here’s an excerpt from a letter sent today by the agency’s student loan ombudsman, Rohit Chopra:
“Our initial findings on the size of the private student loan market are sobering. When we add in the outstanding debt in the federal student loan program, it appears that outstanding student loan debt hit the trillion dollar mark several months ago – much larger than estimates from other recent reports. It seems that this market is too big to fail.
Unlike other consumer credit products, student debt keeps growing at a steady clip. Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us.”