New York Fed chief warns on US student debt

Jennifer Bissell:

A top Federal Reserve policymaker warned on Monday about the long-term consequences of student debt on home ownership and consumer spending, saying that college loan delinquency rates remained stubbornly high.

William Dudley, president of the New York Fed, said seriously delinquent student debt rates across the US — the highest of any category of household debt by far — increased to 11.2 per cent in the last three months of 2016. The next category — serious credit card debt — remained at 7.1 per cent. Seriously delinquent is debt that is 90 days or more past due for payment.

Aggregate student loan balances, meanwhile, stand at $1.3tn, a 170 per cent increase from 2006, according to the New York Fed, as more students take out larger loans and after states have reduced their financial support to colleges.