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Young people are drowning in student loan debt.
- Millennials in the US aged between 18 and 29 had debts exceeding $1 trillion at the end of 2018.
- The vast majority of the debts were in the form of student loans, a huge and growing problem for young people.
- It's the highest debt exposure for this age bracket since late 2007, the start of the global financial crisis.
Young Americans have yet another thing to worry about: debt.
According to figures from the New York Federal Reserve Consumer Credit Panel, millennials aged between 19 and 29 had student loan debts exceed $1 trillion at the end of 2018. It's the highest debt exposure for this age bracket since late 2007, the start of the global financial crisis.
Look at this staggering chart below:
New York Fed Consumer Panel/Equifax
Student loans have become a contentious sector of the market, and saw a record $166 billion in delinquencies in the fourth quarter of 2018, according to the Federal Reserve Bank of New York. Figures suggest that around 40% of outstanding debts will default by 2023, a staggeringly high number, considering that mortgage defaults at the height of the financial crisis only reached 11.5%.
Mortgage debt makes up the vast majority of overall consumer debt, but it's not growing nearly as fast as student loan debt. Since 2009, mortgage debt increased 3.2% while student loan debt grew 102%, according to Bloomberg. Missing student loan payments could complicate the prospects of getting a mortgage in the future given the expected harm caused to a person's credit profile.