There’s more troubling news about student loans, the highest source of non-mortgage debt.
This chart from the New York Fed’s Quarterly Report on Household Debt and Credit shows that the delinquency rate on student loans now exceeds that of credit card loans:
Photo: New York Fed
11% of student loans are 90 days delinquent or more. The NY Fed admits that this number should be roughly twice as high because “almost half of these loans are currently in deferment or in grace periods and therefore temporarily not in the repayment cycle.”
CNBC’s Kelly Evans thinks this real delinquency rate “begs for an overhaul of this increasingly important market which has put significant taxpayer dollars at risk.”
While total debt and delinquencies have spiked, job opportunities and earnings for college graduates have plummeted. Scott Cohn of CNBC, citing a study from the Institute for College Access and Success, reports:
…a stunning 37.8 per cent of recent graduates are working in jobs that do not require a college degree. The study said that means wages are depressed, making the situation for graduates even more difficult.
Here’s a chart from Citi that shows the reduced earnings potential for college graduates:
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