Feb 20, 2017 09:01 AM EST
The student loan record in the United States has already reached its highest last year when it hit a record of $1.31 trillion, spread out among about 44 million borrowers, highlighting the crisis that has drawn attention from both political parties.
A report by the Federal Reserve Bank of New York which was released last Thursday states that a significant increase in the household debt in 2016 was led by the increase in student debt, as well as auto debt. And just last year, the total amount of household debt has already reached $12.58 trillion, Money reported.
Since 2009, loans for higher education has doubled in figures which has the most influence in the growth of household debt. New York Fed data suggests that almost one quarter of the student debtors are late on their required monthly payments and it remained really high despite many efforts of the former administration to make loan payments easier and affordable, according to Bloomberg.
This continuous increase in the student debt concerns federal regulators who are responsible for policing financial markets. Student debt was labelled as a risk that could slow down the economic growth of the country. President Donald Trump, in his campaign, likened it to an "anchor that prevents America from advancing".
The reality is said to be possibly worse than the data on the report because it is based on a sample of household credit reports which are found to be filled with errors, according to the regulators. The Federal Reserve Board in Washington pegged the total amount of student loan at $1.4 trillion.
If there is only one good news on the report, it would be the fact that the total student debt increased to just 6.3 percent compared to last year, and the smallest percentage since 2003.
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