Happy birthday, America’s $1 trillion student-debt problem

April 25, 2018 | | MarketWatch |

Six years ago today, on April 25, 2012, activists took to the streets to mark the country’s outstanding student-loan debt surpassing $1 trillion. And in the years since, many of the trends that pushed student debt levels to climb have persisted and in some cases gotten worse.

Focusing on the $1 trillion mark is somewhat “arbitrary,” given that it doesn’t change the debt burdens individuals are managing every day, said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank. (Outstanding student debt reached $1 trillion during the second quarter of 2012, according to the Federal Reserve, which includes April.)

Still, Huelsman said these kinds of “big round numbers” can help galvanize people around the issue. “Rising student debt has really happened over a 20-year period,” he said. [...]

“There are broader issues in the economy that show up in the student debt figures,” Huelsman said. “But it’s also a set of deliberate policy choices that we’ve made at the federal or state level to not meet the rising demand with the investment that previous generations have received.” [...]

[Persistently high levels of student-loan delinquency] gives cause for concern, particularly given that federal student loans offer so many options for borrowers to stay current, Huelsman said. Borrower advocates have said high levels of student loan delinquency and default point to student-loan companies hired by the government not doing enough to work in borrowers’ best interest.

“I often hear that the big numbers are not necessarily what we should worry about with regard to student debt, but at some point it has to matter,” Huelsman said.