After looking a little closer at yesterday’s latest Consumer Credit report from the Fed, the growing student loan debt began calling out to be transformed into a chart and I was happy to oblige.
Technically, the “Student Loans” item below is nonrevolving credit held by the Federal Government, but, it’s basically all student loans and it’s been the most important factor in the recent rise in consumer credit.
It’s not really a big surprise to see what happened during the 2008 to 2010 period as the financial crisis led to widespread deleveraging for everyone except for those with student loans, but I was taken aback at how much student loans contributed to the growth in consumer credit over the last two years.
Student loans accounted for 72 percent of the increase in consumer credit in 2012 and, over the last two years, it accounted for 91 percent of the overall increase. Since 2008, student loan debt has increased by $434 billion while all other consumer credit declined by $322 billion. As I said … amazing!