There's A Huge Difference Between Student Debt Today Vs. Housing Debt Before The Crisis

American college grads are saddled with lots of student debt. With unemployment rates high and delinquencies on the rise, the question is whether student debt is putting the economy at risk of a crisis.

In a recent note, Vanguard's Joseph Davis gave some context to this question. He drew up a comparison of student debt levels with mortgage debt levels before the subprime crisis.

It's not even close.

At its peak in 2007, mortgage debt to GDP was 62%. Right now, outstanding student debt is just 7%. Davis created a handy table showing further comparisons.

But the benefits to income from greater education far outweigh those costs: While the existence of student debt lowers the odds of homeownership, graduating from college increases the likelihood of purchasing a home by 10.8%, relative to not attending college at all.

All this debt, then, is presumably leading to a payoff. It may be slower in coming, but we're definitely not heading over a Lehman cliff because of it.