Student Loans Hit Record $1.08 Trillion; Delinquent Student Debt Rises To All Time High

Tyler Durden's picture

While the bulk of the quantity data contained in the Fed's quarterly Household Debt and Credit Report is known in advance courtesy of the Fed's monthly tracking of household revolving and non-revolving debt, the quality components always provide a welcome insight into the state of the US household. It is there that we find that the most disturbing trend in recent years: the encumbering of students with record amounts of loans continues. In fact, as of December 31, the total amount of non-dischargeable (for now) student loans hit a new all time high of $1.08 trillion an increase of $53 billion in the quarter. By comparison, total credit card debt as of the same period was "only" $683 billion. At this rate, total student loans will be double the size of all credit card debt within 2-3 years.

What's worse, while the 90+ day student debt delinquency rate did post a tiny decline from 11.8% to 11.5% in Q4, on a total notional basis due to the increase in outstanding balances, as of this moment the amount of heavily delinquent student loans has just hit a fresh record high of $124.3 billion, up from $121.5 billion in the prior quarter.

So: when does the Fed finally admit i) there is a student loan problem and ii) the only way to solve said problem is to promptly monetize it?

Finally, putting new "debt" creation in perspective, in 2013 just student and car loans alone represented 108% (that's right, more than all) of total household debt created.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
VD's picture

debt-jubileeeeee! (for institutions holding toxic debt, NOT for indentured debt-slaves [wit or w/out degreez])...

Looney's picture

One Tweellion? Awww... I feel so smarterer today!  ;-)


666's picture

Being a good citizen, I'm going to put all my money in bank accounts so the gubmint can confiscate it and solve the student loan problem.


nuclearsquid's picture

Well, if they want to drive down those 90+ DPD numbers, all they have to do is figure out a way to repo degrees.


zaphod's picture

To be fair to the borrowers, what they are borrowing is not real money but funny paper money that constantly loses value and will be worthless someday. So it is not an entirely absurd thing to do (btw I have always worked to have zero debt).

The issue is people accustomed to borrowing will have no idea how to live in a sound money environment if/when the FED falls 

J S Bach's picture

Those dead-beat student slackers.  They're not being very good little debt slaves.

jbvtme's picture

i am auditing classes (geology and chemistry) at the local education camp ($60K per). i am learning the what and sometimes the how of things, but never the why. i have the same feeling that i had as a kid growing up. they're not telling the truth.

j0nx's picture

You may be tongue in cheek but that's actually not a bad idea. If you default on student loans then you should be able to claim BK and not be required by law to pay the loan back but you also forfeit the degree. All records of you attending college should be wiped and your diploma invalid and any attempt by the borrower to claim he has a degree should be fraudulent. Treat the student loan like you would a car or a house: don't pay then you lose the collateral.

Greenskeeper_Carl's picture

there are millions of people, my wife included, who would happily do that. Here is your piece of paper back, have a nice day. the problem is that when you lose your house, the bank or whoever now has your house as collateral, which they can resell and recoup at least some of their loses. With a college degree, you can't give back the time spent 'educating' you by the 'professors' at your college. the govt gave you 50k, which you then gave to a college, so unless the college was obligated to give the money back to the govt that was spent by the borrower to get said degree, it wouldnt work. Not that I care one bit about the college or the govt losing that money. too bad your idea will never come to fruition, because millions of 20 somethings would no doubt do it

Superdude's picture

I agree that many would hand in degree for debt forgiveness. How can a 18 year old possible know what they are going to do in two weeks, let alone for a career. I'd be willing to wager that the same people that walked away from debt associated with a bung degree would then re-enroll and get training that paid. Smartest peer was a welder first. He would work holidays at triple time. Would have been debt free except he got divorced halfway through. I asked him what the sea was like towards the end. He said he had lots of hallway see. Walked by the ex, "Fuck you" she would say, "Fuck you too" was his reply. Still laugh at that one

StychoKiller's picture

Hmm, so maybe the Govt. should clawback munny paid into said educational institutions (for supplying a defective product!)

Superdude's picture

This is assuming the banks also played fair with students. I decided to grant myself a bursary after dealing with a student loan program that got swallowed up by various other institutions. I cannot speak for others, but the contempt the bank showed me was enough to walk away from a portion of my loan owned by the final bank that screwed me over in the middle of my doctorate, to the point where I would have had to withdraw if not for help from family. I'd love to see some schmuck come and say I'm no longer a doctor because money changers are getting a dose of their own kind. While I can appreciate your thoughts, the crowd that looks for simple quick solutions without looking at or acknowledging the complexity of a situation, is usually the same crowd that takes up pitchforks and thinks burning everything down is a good idea.


RafterManFMJ's picture

I'm truly saddened no one can figure out the solution to the cost of higher education:

1. Get a STEM degree.
2. Lard up on as much debt as you can while living cheaply; all excess goes into Gold Eagles.
3. Minor in Portuguese or Mandarin.
4. Upon graduation decamp for Brazil or China with a smile on your face and a jingle in your pocket.

If you cannot figure out how to avoid massive debt and penury caused by non- dischargeable student loans, that might be a tell that you should not be attending college.

Its_the_economy_stupid's picture

i wonder if I should start a company that buys distressed student loans one at a time for STEEP DISCOLUNTS after years of failed collection attempts and then sell them back to the student at cost.

TruthInSunshine's picture

And outstanding consumer debt is now at an ALL TIME RECORD of nearly 3 trillion (surpassing peak of 2007). Swipe those Crdit Cards & take those cash advances, debt serfs

At least this makes sense, though: University of Phoenix, Everest University, and - for that matter - ACTUAL COLLEGE GRADUATES FROM REAL COLLEGES used their federally guaranteed student loans to buy new cars so they could try & land $9 per hour part time jobs after graduating (plus, they're buying skankily advertised ObamaCare, if the administration is to be believed, so they used those loans for those premiums, too, maybe).

Alas, their non-benefits, $9 per hour, part time jobs failed to materialize in the ObamaConomy.

So I say unto thee, MOAR taxpayer-backed loans for ITT Tech, University of Phoenix and Everest University.

Education Connection

This chick was a waitress and now she's the chief engineer for CERN.

I'm working for an hourly wage,
I went to high school,
but I didn't do great,
Still i gotta make more cash,
more education is what im looking at
when i get a degree i will make a bigger salary
so now I've got to see
which college is right for me
i went on the internet and found
Education con-nec-tion
i took a some free tests
to find out my direction
im taking my classes in my PJs online getin my degree at my own time (9 1/2 years for an associates degree in criminal justice because she's a huge fan of Miami CSI)
Education connection
Matched me with the right college for free!

fonzannoon's picture

"So: when does the Fed finally admit i) there is a student loan problem and ii) the only way to solve said problem is to promptly monetize it?"

The next election some republicrat will use that as his/her/it's platform to give main street a bailout since wall street got theirs, and will be elected in a landslide.

Harbanger's picture

Why a republicrat?  That's a democrat play to win over the now disenchanted obamabots.   You have no idea which end is up do you?

fonzannoon's picture

A republicrat because it will be one or the other, because they are one in the same. You will figure that out one day.

Harbanger's picture

Clueless Fonz.  Nobody is going to outgive the Democrats.

fonzannoon's picture

That hamster wheel will start turning one of these days. I don't know what happened to you, but I believe in you.

NOTaREALmerican's picture

How many "conservatives" have ever wanted to cut the following Big-Gov scam:  Big-Ag, Big-MIC, Big-Road, Big-Water, Big-Airport, Big-Energy, Big-House, Big-Fin, Big-OldFart, Big-OldFartHealthcare, Big-AntiDrug, & Big-PoliceState.

You right that Democrats love all Big-Gov scams, but the Republicans ("conservative") have always loved Big-Gov too,  but they like manly Big-Gov.

"Liberals" like all Big-Gov, and "Progressives" like girly Big-Gov, and "conservative" like manly Big-Gov.

People vote with their genitals.

Harbanger's picture

Fuck you and your everyone is in on a Goverment scam shit.   You don't know any conservatives.  You only know republican scumbags like yourself.

NOTaREALmerican's picture

Re:  You don't know any conservatives

Are you talking about "conservatives" who routinely want Big-Gov to regulate how people use their genitals?

OR are you talking about the 5 or 6 actual Conservatives that exist someplace?

Most of the Republican "conservative" I met love Big-Gov.

Harbanger's picture

They're all republican scumbags, you never met a conservative.  They will be the only survivors after the social collapse.

NOTaREALmerican's picture

Re:  They're all republican scumbags, you never met a conservative.

If Republicans aren't conservatives then they are like Democrats.   Isn't that what you disagreed with first time?

We've only got Big-Gov loving Repubicrats.  

TruthHunter's picture

Definition of Republican: Someone who votes tax cuts for the super rich in the vain

hope he will some day be one of them.

pods's picture

Conservative is the term used to describe someone running for office on the Republican ticket.

Which, when elected, promptly forget everything they promised.


Dr. Engali's picture

"Which, when elected, promptly forget everything they promised".


I define that as: any political asshole seeking power.

onewayticket2's picture

Harb is generally correct.  what you THINK is a 'conservative' is some guy like joe scarborough....who says he's a "conservative" about 10X a day and proves he's not about 100X a day.

self sufficiency, minimal govt, personal responsibility not transfer payments. 

fonzannoon's picture

Ha funny. Thank you both so much for telling me what I think.

Dr. Engali's picture

I used to believe that bullshit too, until I watched how the "conservatives" lined up lockstep behind Bush as we bombed the shit out of a country that was of absolutely no threat to us. I also see the conservative hypocrisy when they turn to government to regulate every aspect of what a human does with their body. Why do I care if two guys want to get married, or if somebody wants to smoke a bowl. What the fuck good has the war on drugs brought us besides more crime and a bloated prison system, and what the hell is .gov doing in the marriage business to begin with? Conservatives are just as statists as the liberals are. They just don't like to admit it.

onewayticket2's picture

Bush isnt a conservative. he's republican.

Dr. Engali's picture

No fucking shit, but you didn't see any conservatives questioning him. They were the loudest war drum beating suckers of them all.

pods's picture

See my definitions above. Can describe about every "conservative" that got to high office or a leadership position in the house or senate.

Outliers act as safety valves, see Ron and Rand Paul, etc.

Whole system is run to keep you thinking you can change the course you are on.  

If you didn't have tha belief, you would have to vote with the ammo box.


Never One Roach's picture

The Yutes are merely imitating Wall Street Bankers, CEOs, politicans, etc. porking the system, so they figure, "Why not me also?"

Yes_Questions's picture



Thank you Doctor.



fonzannoon's picture

I'm not going to insult you back. You are confused and are just lashing out. I can't help you. Here try this.

Greenskeeper_Carl's picture

i really can't believe we are having this conversation here. You would think that people who want to come here and read these articles for a couple years would have given up on the fiction that there is a dimes worth of difference between the two parties. They both love their welfare. To see people here defending republicans as being above that sort of thing is hilarious.

Dr. Engali's picture

It's funny how the "limited government conservatives" always want to turn to government when they want to regulate people's lives.

onewayticket2's picture

then vote libertarian....and tell your friends to as well.....geez.

Harbanger's picture

Since I have more than enough money in the US and phys in Hong Kong to save my ass for 3 generations.  I'm voting and donating money to the most progressive Democrats I can find from here on in just to bring it to a head.

fonzannoon's picture

well at least it explains why you were such a big hit with the lesbians at that bar.

 I'm going to keep going with the funny until you lighten up. 

Dr. Engali's picture

 "I'm going to keep going with the funny until you lighten up."


Let me know when you start :)

Harbanger's picture

Most chicks happen to be very superficial and are dazzled by good looks, lesbo or not.  Your country and society is headed down the toilet.  What's to lighten up about?  Note I said your country because I'm not even American, yet I understand your constituion and feel for all the good people here that will be hurt by the progressive downturn.

fonzannoon's picture

the progressive downturn that you are heavily funding.....


Harbanger's picture

Yep, from here on in.  I'm not fighting for you bitchez anymore,  may as well be on the winning side.

fonzannoon's picture

You are not an american, you are heavily funding the progressive agenda because you want to be on the winning side. 

this is quite a puzzle we are putting together here.