Consumer borrowing rose $8 billion in March from February to $2.81 trillion, the smallest uptick in eight months, according to the Federal Reserve's G.19 report released Tuesday.
Student loan debt has been the biggest driver of borrowing since the recession ended in June 2009, according to quarterly data from the Federal Reserve Bank in New York. Student loans reached $966 billion in last year's fourth quarter, up from $675 billion in the second quarter of 2009.
The overall consumer borrowing gain was fueled by more loans to buy cars and attend school. The non-revolving credit category measuring those loans jumped $9.7 billion to $19.6 trillion.
A measure of credit card debt dropped $1.7 billion to $846 billion in March, 17.2% below the peak of $1.022 trillion set in July 2008, a decline suggesting people are hesitant to take on high-interest debt to make purchases.
Many economists believe consumers will remain cautious throughout this year, partly because of the increase in Social Security taxes that took effect on Jan. 1 that has cut take-home pay.
From January through March, consumers boosted their spending at the fastest pace in more than two years. However, they had to trim the pace of their savings to finance the faster spending. Their after-tax income dropped by the largest amount since the final three months of the recession in 2009. Part of the drop in after-tax income reflected the increase in Social Security taxes.