Student loan debt now surpasses credit card debt

Parents Forum
1

<p>From the Wall Street Journal:</p>

<p>Student-Loan</a> Debt Surpasses Credit Cards - Real Time Economics - WSJ</p>

<p>From the article:</p>

<p>
[quote]
Consumers now owe more on their student loans than their credit cards.</p>

<p>Americans owe some $826.5 billion in revolving credit, according to June 2010 figures from the Federal Reserve. (Most of revolving credit is credit-card debt.) Student loans outstanding today — both federal and private — total some $829.785 billion,

[/quote]
</p>

<p>These next few years could be very interesting.</p>

2

<p>Student loans is good money for banks. Even if you die, if someone cosigned your loan, they need to pay it off on your behalf.</p>

3

<p>At least the student loans are an investment and the payments have an end. With the credit card debt, technically you could pay forever & never be done or even remember what you bought in the first place.</p>

4

<p>No surprises here. My kids have $1000 limits on their credit cards. Their Stafford loan balances exceed that each year!</p>

<p>Was this article supposed to surprise us?</p>

5

<p>My kids don’t even * have* credit cards- they pay with debit cards , hasn’t cramped their style a bit. - they don’t need to go into debt for a wardrobe or to go out to dinner- but they will for an education that won’t be trashed in five years or need repairs.
;)</p>

6

<p>And how much of those credit card debt was used to pay tuition or a result of having to pay tuition bill?</p>

7

<p>I wonder how much of the 830 billion or so is for A. Publics B. For Profits C. Private not for profits ?</p>

<p>And how much of that which is for private not for profits, is for the schools within the top of the (forgive me) USNWR rankings - say top 100 Nat U’s and top 30 LAC’s.</p>

8

<p>"And how much of those credit card debt was used to pay tuition or a result of having to pay tuition bill? "</p>

<p>some folks did, and do, pay for house down payments by maxing out credit cards, IIUC. But no one adds that to data on national residential mortgage debt.</p>

9

<p>I did some searching and found these statistics</p>

<p>Average Student Loan Debt</p>

<p>[FinAid</a> | Student Loans](<a href=“Your Guide for College Financial Aid - Finaid”>Loans - Finaid)</p>

<p>Here is an excerpt
*Few students can afford to pay for college without some form of education financing. Two-thirds (65.6%) of 4-year undergraduate students graduated with a Bachelor’s degree and some debt in 2007-08, and the average student loan debt among graduating seniors was $23,186 (excluding PLUS Loans but including Stafford, Perkins, state, college and private loans). Among graduating 4-year undergraduate students who applied for federal student aid, 86.3% borrowed to pay for their education and the average cumulative debt was $24,651. (For just federal student loan debt, excluding PLUS Loans, the figures are 61.6% and $17,878.) Average cumulative debt increased by 5.6% or $1,139 a year since 2003-04. When one includes PLUS loans in the total, 66.0% of 4-year undergraduate students graduated with some debt in 2007-08, and the average cumulative debt incurred was $27,803. (About two in fifteen (13.5%) of parents borrow PLUS loans for their children’s college education, with a cumulative PLUS loan debt of $23,298.) *</p>

<p>Now for credit cards
[Credit</a> card statistics, industry facts, debt statistics](<a href=“http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php]Credit”>http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php)</p>

<p># Average credit card debt per household with credit card debt: $15,788 </p>

<h1>76 percent of undergraduates have credit cards, and the average undergrad has $2,200 in credit card. Additionally, they will amass almost $20,000 in student debt. (Source: Nellie Mae, “Undergraduate Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends”)*</h1>

<p>The average student has more in student loans, which are long term, not really revolving and hence the tendency is pay of revolving loans first. This means students are going to be paying off student loans for a long time and this is going to become a bigger factor in the debt income ratio. Sad but directly attributable to spiraling college costs.</p>