But there is one glaring exception to this trend: student debt. Over the past decade, the level of outstanding student debt has almost tripled to $1.3tn.
And although the law makes it relatively hard to walk away from student debt, defaults are also strikingly high. There are many ways to measure this figure but the Department of Education reports that Americans who were due to start repaying their student debts in 2011 had a 13.7 per cent default rate last year. This is a touch lower than the previous year (14.7 per cent) but dramatically higher than it had been since the mid-1990s; and it is higher than the credit card default rate.
This figure may understate the problem, however. The Treasury Borrowing Advisory Committee released a report late last year which suggests that actual defaults (using its data) were just 9 per cent but the “shadow” default rate — the debt “delinquencies” that are not fully reported — could be 23 per cent. Other economists have similar estimates.