Student loan debt continues its record-breaking rise in the United States. As of November, the amount of outstanding debt has reached $1.465 trillion. As with any kind of debt, this amount is creating a lot of fiscal risks and putting millions of Americans in danger.
“Over 90% of student loans are guaranteed by the U.S. Department of Education, meaning that if a recession causes a rise in youth unemployment and triggers mass defaults, this contingent liability could prove burdensome for the U.S. government budget,” said Paul Della Guardia, economist at the Institute of International Finance in emailed comments.
Most of the student loan debt has accumulated since the recession is ended. As the numbers continue to increase, so as the number of students who have defaulted. Those who defaulted have done so at a faster rate than at any other time in history. It’s definitely revealing a lot of hardship within the younger generations.
The Age of Student Loan Debt
The largest age group since 2012 to suffer under the burden of student loan debt continues to be millennials. They are between the ages of 24 and 33. This is the age when most of us seem to be the most financially vulnerable. Unemployment was twice as high back when this age group attempted to join the workforce.
Even after they graduated, it took lineal three times as long to find a job than it does today. You can imagine the amount of frustration and misery that endured during this time. You had people graduating college with thousands of dollars’ worth of student loan debt. One they did graduate, they had no opportunities. The jobs just weren’t there.
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The students found themselves in a cycle of perpetual student loan debt. Their loans defaulted but still collected interest. The interest rate for a direct student loan before July 1 of 2018 is 100% higher than it was in 2012. This only adds to people’s trouble, as they can never dig themselves out of the hole. No matter what they pay, interest comes right back behind and adds more.
Broken Down by Age
• Ages 25-34 owe $489 billion
• Ages 35-49 owe $530 billion
• Ages 50-61 owe $213 billion
• Ages 62 and over owe $62.5 billion
It’s interesting to see that even baby-boomers and the oldest generation still owe billions. Student loan debt hits every generation. There appears to be no help in sight.
