The New York Fed recently reported that total household debt in the United States has reached a staggering $13.86 trillion with $192 billion in new student loans being recorded in the 2nd quarter of 2019.
Outstanding student loan debt fell from $1.49 trillion in Q1 to $1.48 trillion for the current quarter, however, an increasing number of graduates are not able to pay back their outstanding and oftentimes debilitating loans.
The term “severely derogatory” is defined by the report as “any stage of delinquency paired with repossession, foreclosure, or ‘charge off’” (meaning that the lender has removed the debt from its books).”
As we see in the chart above, student loans are continuing to place an increased burden on borrowers which have led to additional delinquencies in recent quarters.
A recent study from the MIT AgeLab reports on the impact of student loans and found that one in five Americans are struggling to pay for childcare because of the burden caused by their student loan balance.
The MIT AgeLab study says the average student loan payment is $393 per month with a general balance of $37,000.