Exploring Student Debt: The National Perspective

As we continue our look into the various aspects of student educational debt, we shift our focus from a Texas-only review in our previous blog posts (here and here) to review the national trends. Even though the Texas data as tracked in the 60x30TX Plan show that student loan debt indicators in Texas are generally trending in the desired direction, we need to look more broadly and comprehensively at various debt-related metrics in order to understand fully the complexity of student loan debt in America.

Household Debt Balance and Types of Debt

In zooming out to the national conversation, we wanted to better understand how student loan debt stacks-up when compared to other forms of household debt. Conveniently, the Federal Reserve Bank of New York’s Center for Microeconomic Data recently published an update to its long-running “Quarterly Report on Household Debt and Credit.” Within the Quarterly Report, the total household debt in the United States is disaggregated into six categories: Mortgage Debt, Home Equity Line of Credit, Student Debt, Auto Debt, Credit Card Debt, and Other Debt. The most recent Quarterly Report shows that total household debt approached $15.6 trillion dollars in Q4 of 2021, as 2021 marked the first time that total household debt in the United States exceeded the $15 trillion mark.

Household Debt (Categories)

The first visualization below shows the amount of household debt within the six household debt categories with the total household debt figure at the top of the full bar in each year from 2003 to 2021.
The total household debt has grown from just over $8 trillion in 2003 to almost $15.6 trillion in 2021, as the total household debt in the U.S. passed the $15 trillion mark in 2021, representing a 93% increase.
Mortgage debt has comprised approximately 70% of total household debt across all years in the data, as mortgage debt increased at basically the same rate as total debt in growing 93% from 2003 ($5.66 trillion) to 2021 ($10.93 trillion).
The bar segment just above mortgage debt is student loan debt, which is inclusive of federal student loan debt. In 2003, credit card debt and auto loan debt were equal at $700 billion each, comprising about 9% of the total household debt each, with student loan debt ($250 billion) accounting for just over 3% of total household debt.
In 2021, federal student loan debt replaced credit cards and auto loans as the second-highest debt category. With student loan debt increasing to $1.58 trillion, auto loans to $1.46 trillion, and credit cards to $860 billion in Q4 of 2021, student loan debt now comprises more than 10% of total household debt.

Household Debt (Change)

Clicking on the second tab below shows the change over time in each of the household debt categories.
Since 2003, federal student loan debt has increased 532% across the United States.
The percent change in federal student loan debt is almost 5-times as high as the second-highest category, auto loans, which saw an almost 109% increase from 2003 to 2021.
Mortgage loans grew by 93% in the 19 years represented in the data, while credit card debt increased by 23%.

NOTE: Due to the volume of information in each visualization below, we recommend that you click the “Full Screen” button in the bottom-right corner to enhance viewing of the data.

So What?

With such a huge amount of growth in student loans from 2003 to 2021, we wanted to see what the data could look like in the next decade. While these forecasts are methodologically simplistic from the standpoint of only using the historical data from the most-recent NYFed Quarterly Report, there is still insight that can be gleaned.

While the housing bubble burst of 2008 resulted in resetting the floor of total and mortgage debt in 2012, if you follow the actual and forecast data from 2012 through 2031, you will see essentially a linear trend increase over time. If these trends continue, the total household debt would exceed $19 trillion in 2030 and be approaching $19.5 trillion in 2031. This change would represent a 141% increase from 2003 to 2031.
Mortgage loans would peak in 2031 around $13.5 trillion, which would be a 138% increase in the full range of data.
Following the light-blue student loans line across the chart, we see a forecast value of $2.35 trillion in 2031. If that forecast materializes, it would represent a 49% increase from the $1.58 trillion in 2021, but would be more than an 840% increase in total federal student loan debt from 2003 to 2031.

Given that student loan debt does not occur in a vacuum, we know there are a multitude of factors that account for the increases we have seen and will likely continue to see in student loan debt. We will use the next few months of blog posts to explore some of these factors and continue the conversation around this complex topic of student loan debt in America.

NOTE: Due to the volume of information in each visualization below, we recommend that you click the “Full Screen” button in the bottom-right corner to enhance viewing of the data.