America’s Student-Loan Burden Is Getting Severe
New York Fed data show that as the balance grows, households are either able to pay on time or default.
The share of households deemed “severely derogatory” on payments isn’t going away.
Photographer: Seong Joon Cho/Bloomberg
There’s some good news and bad news about the state of Americans’ finances embedded in the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit.
First, the good news: 95.6% of households were current on their debt payments as of the second quarter, whether that’s mortgages, student or automobile loans or credit card bills. That’s the largest share since the third quarter of 2006, which of course was well before the financial crisis and the start of the last recession. It’s a sign that many individuals and families are continuing to benefit from this record-long recovery and have the resources to make timely payments on what they owe.