Student Loan Debt Climbs to Record High $1.4 Trillion in 2019

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Want to know what's holding back housing and family formation? Look no further than student loans.

There are some interesting, but misleading charts on the student debt problem in Experian's report: Student Loan Debt Climbs to $1.4 Trillion in 2019.

By misleading, I do not mean purposely so, nor do I mean inaccurate. I simply mean that on the surface one is likely to draw the wrong conclusions.

Please reflect on the above chart. I added the highlight in yellow and the comment.

While pondering, here are some additional charts.

Consumer Debt Balances by Credit Product

Student loans represent the second-largest credit debt for Americans, trailing only mortgage loans. Nationwide, there are more than 148 million outstanding student loan accounts.

There is nothing misleading about the highlight. I simply thought it was noteworthy.

Dubious Congratulations to North Carolina

What's Misleading?

I hope you gave this some thought.

14.4% of the population with student debt does not seem overwhelming.

But those under the age of 18 don't have much or any student debt. Those over the age of 40 don't have much or any student debt.

Concentration

  • Student debt is concentrated in age groups that have few assets.
  • Student debt is concentrated in age groups also struggling with credit card debt.
  • Finally, and most importantly, student debt mostly impacts those in age groups who may want to buy a home, get married, or start a family.

Housing Starts

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On Tuesday I commented: Housing Starts Down Slightly: Single-Family Very Weak, Down 12.5% Year-Over-Year

Mortgage News Daily managed to spin the report as positive. It was really pathetic as the the above chart shows.

Single-family starts are well below where they were in 1959. And that is without accounting for rising population.

Piss Poor Monetary Policy

Fed policy bailed out the banks by creating another asset bubble.

That bubble is to the benefit of the banks, the already wealthy, the asset holders, and the baby boomers, in that order.

Millennials, the Screwed Generation

I commented on the prospects in Millennials, the Screwed Generation, Blame Boomers For Making Their Lives Worse

Clearly Fed policy is directed at keeping assets prices high and boomers spending.

There are just two problems. The approach is amoral. There ought not be a Fed in the first place.

Piss Poor Fiscal Policy

On Tuesday, Trump Lashed Out at ECB president Mario Draghi in a Tweetstorm.

Strange Bedfellows

Curiously, Elizabeth Warren in Bed With Trump: Both Want to Sink the Dollar.

Trump sided with progressive illiterates who believe a weak dollar is good.

Please explain that to struggling millennials stuck in student loans but otherwise wanting to get married, buy a home, and start a family.

Deflationary Outcome

The outcome of piss poor monetary policy coupled with inept fiscal policy is easy to see: A massive debt deflationary collapse in asset prices looms.

Meanwhile Economic Stupidity is Still Well Anchored as illiterates at the Fed debate the entirely useless Phillips Curve.

Bubbles B. Goode

Let's wrap things up with my video tribute to this mess: Bubbles B. Goode

Mike "Mish" Shedlock

Comments (6)
No. 1-4
Menaquinone
Menaquinone

"Neither a borrower nor a lender be" from Shakespeare's Hamlet.

Those who did not learn this in high school do not belong in college. Granted, the average education major is not qualified to teach school.

hmk
hmk

I don't see how the federal reserve is in any way responsible for student debt. I think its because of the unlimited access to student loans which increases demand for college education. As demand increases prices increase just because they can. Same dynamics in the housing crisis easy money leads to price increases. Colleges also are responsible as all the extra money coming in doesn't get allocated to education but to administrative areas as well as new pretty buildings. They make no effort to keep tuition down. Students are also basically stupid. Instead of going to a community college for two years and going to a local university they can commute to they instead go to a university away to get a "living experience". I have witness this idiocy on numerous occasions. One friend who can't afford it allows his daughter to live in an apartment off campus while her commute from his home would be 15 minutes. WTF??? Another person I know let his daughter go away to a university instead of going for free to a local university via a scholarship. I couldn't help myself so I asked why he allowed this. His response: he didn't want to her to be upset with him?? I would have loved to tell him to grow some balls but I kept my mouth shut. Also, universities are lengthening the years needed for a degree so many can't graduate in 4 years and also offering worthless degrees that are unmarketable. It is high time for a tech disruption of this corrupt cabal. Creative destruction of the education monopoly is over due,

Blacklisted
Blacklisted

Once again, you divert the blame from CONgress, who under Clinton eliminated the ability to expunge student loan debt through bankruptcy. Politicians (and Universities) knew that vulnerable students were the next mark, and they made sure their bankster donors had minimal risk, as these youth were turned into debt slaves - and people wonder why youth suicides are up?!?

Eddie Coyle
Eddie Coyle

Not very bright to spend incredible amounts of money for private schools to obtain a degree / job that does not quickly amortize that debt. Unless you are independently wealthy you need to be going to a community college / State school and taking curriculum that are in DEMAND.