In its quarterly report on household debt and credit, the Federal Reserve Bank of New York (NY Fed) found that total outstanding student loan debt increased in the first quarter of 2018, while delinquencies showed a slight improvement.
The report — released on Thursday — found that overall, total household debt increased by $63 billion during the first quarter of 2018, and has increased for 15 consecutive quarters. Among that increase, total outstanding student loan debt grew by $29 billion between the end of the fourth quarter of 2017 and the end of the first quarter of 2018 — an increase of 2.1 percent to a total of $1.41 trillion.
But the percentage of student debt that is more than 90 days delinquent or in default decreased slightly, from 11 percent to 10.7 percent. The report also showed that the percentage of student loans that became newly delinquent in the first quarter of 2018 also slightly decreased, from 9.3 percent to 8.9 percent.
However, the NY Fed cautioned — as it has in previous reports — that numbers related to student loan delinquency are likely significantly underestimated due to the high percentage of loans that are currently in forbearance, deferment, or in a grace period. That fact implies that the true delinquency rate could be twice as high, the report said.
The NY Fed noted in an April 2017 report, which examined student loan trends over a 10-year period, that payment progress has slowed, presumably due to both higher balances and participation in income-driven repayment plans. The higher balances, increased participation in student loan programs, and slowed payment progress have pushed up student loan balances, the NY Fed reported.
Publication Date: 5/18/2018