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Outstanding student loan debt is on the rise, edging past a collective $1.5 trillion, according to the Board of Governors of the Federal Reserve’s statistical release on consumer credit.
The first quarter of 2018 showed outstanding student loan debt was at $1.521 trillion, up significantly from the fourth quarter of 2017, when it was $1.49 trillion.
And when compared year over year to the first quarter of 2017, there was also a substantial increase. At that time, the outstanding loans amounted to $1.443 trillion.
The amount of outstanding student loan debt has increased steadily over the past few years, showing the average student graduates carrying a higher load of debt every year.
The outstanding student debt has continued to grow in recent years, with $1.146 trillion in 2013, $1.236 trillion in 2014, $1.32 trillion in 2015, and $1.408 trillion in 2016.
Motor Vehicle Loans Up Also
Student loans aren’t the only type of consumer debt that’s on the rise. Outstanding motor vehicle loan balances are increasing, too. In the first quarter of 2018, that number reached $1.118 trillion, which was up from the fourth quarter of 2017, when it was $1.109 trillion.
That’s a sizeable increase from 2013, when the outstanding auto loan balances totaled $879 billion.
Part of the reason for the trend of increasing auto loan balances is that the dollar amount of each average new car loan has increased steadily over the past few years.
Although no figures were released yet for this quarter, last year’s average new car loan was for $31,099, according to Experian data. In 2016, the number was lower at $30,621. And in 2015, it was lower still – at $29,551.
How Consumers Are Doing Overall
According to the report, consumer credit overall went up at a seasonally adjusted annual rate of 4.2 percent in the first quarter of 2018.
Nonrevolving credit for consumers went up at an annual rate of 6 percent in the first quarter. Nonrevolving credit is the type consumers typically get in an installment loan that’s paid off in monthly payments, such as with mortgages, student loans, car loans, and loans for businesses. This type of debt is comprised of credit that can’t be renewed to be used again when it is finished being repaid.
Revolving credit went down by an annual rate of 1 percent this quarter. This type of credit is the type that people carry on credit cards and home equity lines of credit. Revolving credit does renew after the balances are paid down – a person can use their credit card repeatedly as long as they continue to pay it down to free up the credit each month. But the drawback to this kind of credit is that it generally requires higher interest rates.
Author: Mike Brown
In his role at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.