9 Definitive Charts On The Boom In Student Loans

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Photo: Flickr / jessiejacobson

Many young Americans are struggling to pay off their student loans thanks to elevated levels of unemployment.Ironically, with unemployment levels so high, more and more high school graduates have enrolled in college

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Neal Soss, Credit Suisse’s top U.S. economist recently published a report titled A Lesson On Student Loans, which examines all of the major issues regarding student loans.

“In the past few years, the volume of student loans has increased dramatically, reaching almost $1 trillion by the end of Q1 2012,” wrote Soss.  “Student loans outstanding have surpassed credit cards and auto loans as the second largest form of consumer debt, following mortgages.”

There is no student loan crisis.  But it’s something to keep an eye on.  “Student loans may yet be a test case of the benefits ‒ and perils ‒ of that involvement,” writes Soss.

Soss breaks down the whole story of the U.S. student loan situation in 9 charts.

NOTE: Thanks to Credit Suisse for giving us permission to feature these charts.

Student loans outstanding have more than doubled since Q3 2006 to nearly a trillion dollars

Federal loans (e.g. Direct Loans and Perkins Loans) dominate private loans, state loans, and institutional loans

Student loans continue to be the fastest growing category of household debt. Mortgage, credit card, and home equity debt outstanding have been falling since the crisis

A key reason driving student loan growth is skyrocketing tuition inflation

In July 2010, the Federal government took over most of the student loan business. As long as the delincquency and default rates remain low, the government makes tons of money on this because of low Treasury rates

As job openings have become harder to find, more high school graduates have turned to college

Although high, student loan delinquency rates do not pose a problem. They have only increased by 1.15 percentage points since Q3 2008

Delinquency rates are closely correlated to unemployment rates

Default rates are also closely correlated to unemployment rates. The rate at which default rates occur during the first year of repayment is on the rise

Here are some cities where you might find elevated student loan default rates

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