Student loan debt, from both federal and private loans, has hit the trillion dollar mark, the Consumer Financial Protection Bureau announced March 21. The size of the private loan market is “sobering” and surprising, as the debt is much larger than previous estimates.
”It seems that this market is too big to fail,” wrote the CFPB’s student loan ombudsman Rohit Chopra. “…If current trends continue, there will be consequences not just for young people, but for all of us.”
While the purchase of many consumer products has decreased or stagnated, student debt continues to rise steadily. Not counting private loans, students took out $117 billion in loans last year. Because interest rates remain high and unemployment for recent graduates is relatively low, debt continues to grow once students have graduated.
Students are getting attacked financially on several fronts. A recent study by the Higher Education Executive Officers showed thatstudents are paying a greater percentage of public school tuition than ever before. Additionally, the average 20-something is $45,000 in debt.
In order to help students with their debt before and after college, the CFPB created a variety of tools including the Know Before You Owe student loan project, a student debt repayment assistant, and a student loan complaint system.