• Costa Rica Coffee Guide
  • Costa Rica Real Estate

In the US, people have more trouble paying off student debt than houses

February 20, 2015

WASHINGTON, D.C. – People in the United States are struggling to make timely payments on student loans, according to new data from researchers at the Federal Reserve Bank of New York — even as we dutifully shrink other types of balances.

Student-loan delinquencies increased at the end of 2014: 11.3 percent were at least 90 days overdue in the last three months of 2014, up from 11.1 percent in the previous quarter.

Meanwhile, on the bright, if counterintuitive, side: All other forms of debt have been showing lower delinquency rates, including credit card and mortgage loans. The New York Fed did note, however, that auto loan delinquencies have largely been dropping, but rose slightly last quarter.

The U.S.’ total student loan debt is now nearly $1.2 trillion. One reason the burden is difficult to pay off, Fed researchers wrote: “Student debt is not dischargeable in bankruptcy like other types of debt. … Delinquent or defaulted student loans can stagnate on borrowers’ credit reports.”

It wasn’t always like this. Student loans were the smallest form of household debt until 2009, the Fed data show.

The recession apparently scrambled our borrowing habits. U.S. residents shrank other debts during the economic downturn but kept taking money for college, long trumpeted as the ticket out of hard times.

The surge is fueled by more people borrowing — and borrowing larger amounts. The number of borrowers rose 92 percent between 2004 and 2014, according to the Fed researchers. The average student loan balance grew 74 percent.

Nearly 39 percent of borrowers owe less than $10,000. The median balance: $14,000. About 1.8 million people — 4 percent of borrowers — owe more than $100,000.

Graduates with staggering balances face grim options, unless they’re particularly well off. Student loan refinancing, for example, can significantly drive down interest rates — but it’s available only to those with steady incomes and high credit scores.

Another debt management route: Sacrifice. Economists find cash-strapped borrowers tend to delay buying homes.

Recent history shows the devastating impact. Student loan debt was a significant wealth drain on Generation X, Pew researchers recently found. Millennials could ultimately be hit the hardest.

© 2015, The Washington Post

You may be interested

Costa Rica cancels its biggest year-end parade due to pandemic
Costa Rica
4909 views
Costa Rica
4909 views

Costa Rica cancels its biggest year-end parade due to pandemic

AFP and The Tico Times - May 28, 2020

Costa Rica will not celebrate its traditional Festival de la Luz, a parade of colorful floats that tours the capital…

Tico Talk: 10 Costa Rican Spanish expressions for expats and tourists
Arts & Culture
13945 views
Arts & Culture
13945 views

Tico Talk: 10 Costa Rican Spanish expressions for expats and tourists

Christopher Howard - May 28, 2020

You can’t call yourself fluent in Costa Rican Spanish unless you understand its slang. Over the past months, we have…

Health restrictions in Costa Rica cause tension on border with Nicaragua
Costa Rica
197 views
Costa Rica
197 views

Health restrictions in Costa Rica cause tension on border with Nicaragua

AFP and The Tico Times - May 28, 2020

Thousands of Nicaraguan truckers blocked the country's southern border on Wednesday, in retaliation for the health restrictions imposed by Costa…