From Our Archive: Student Debt in Perspective

The Editors

We read with interest a new Brookings Institution report, Is a Student Loan Crisis on the Horizon?, assessing the weight of the student debt burden. It was also pleasing to see the New York Times, several of our Twitter followers, and others citing work on this blog in counterpoint.

    As part of our policy responsibilities at the New York Fed, we track the landscape of consumer credit, including student loans, using a unique data set developed here. A team of microeconomists described our approach in a March 2012 blog piece on “Grading Student Loans,” and reported key metrics such as the total outstanding student loan balance, averages balances per borrower by age group, and delinquencies at that time. Much of that data is updated quarterly here.

    We also publish related analysis on the effect that growing student debt is having on the wider economy. For example, Meta Brown and Sydnee Caldwell took a look at how extensive debt affects young borrowers’ participation in other economic activity in “Young Student Loan Borrowers Retreat from Housing and Auto Markets.” Brown, Caldwell, and Sarah Sutherland updated that analysis in May.

    It is important to note that the Brookings report relies on borrower-reported data in the Federal Reserve’s Survey of Consumer Finances (SCF) to track the evolution of student debt levels. Analysis on our blog is based on the FRBNY Consumer Credit Panel (CCP), a data set sourced from lender-side information in Equifax credit reports. Our economists recently examined the correspondence between borrower- and lender-reported debts, finding SCF and CCP debt patterns to be quite similar, but with noteworthy exceptions for aggregate credit card debt and aggregate student debt. They report that the aggregate student debt implied by the SCF is roughly 75 percent of that implied by the CCP and other sources. For more detail, check out “Do We Know What We Owe? A Comparison of Borrower- and Lender-Reported Consumer Debt” in our Staff Reports series.

Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.