Middle-aged Americans appear to be struggling the most with student loan debts, according to data released this week by the Federal Reserve Bank of New York.
The delinquency rate - percentage of debt with no payment made for 90 days or more - reached 11.9% for debt held by borrowers aged 40 to 49 as of March. That compares with an 8.7% rate for borrowers of all ages.
Two-thirds of the nation's $900 billion in student debt is held by individuals under 40, the Fed estimates. But borrowers over 40 are having a particularly tough time with student debt for several reasons, consumer and higher-education experts say.
Many are still paying balances from college years ago, while their home values and savings have declined sharply in recent years. Some have stopped payments after losing jobs. Many parents - no longer able to tap home equity to pay for their children's education - are taking out new student loans to do so. An Education Department program that provides loans to parents to fund their kids' education is among the fastest-growing of the government's education loan programs.
High delinquency rates on student debt are causing concerns among economists because delinquencies damage a person's credit, making it harder for consumers to borrow in the future, while causing the total debt to grow as interest and penalties accrue. Student debt has been rising as enrollments and tuition climb. The Fed data show the number of Americans with student debt rose to 37 million this year from 23 million in 2005.
Since 2005, the number of Americans in their 50s with student loans has doubled to 4.6 million, and borrowers in their 60s and older more than tripled to 2.2 million.
The New York Fed report is the latest in a string of government reports to show the quick rise in student debt since the recession and early part of the recovery.
The Consumer Financial Protection Bureau said earlier this year that total student debt outstanding surpassed $1 trillion, exceeding auto and credit card debt. The bureau, which based its numbers on government data and surveys of private lenders, is expected to soon release a more-detailed report to Congress.