Excerpt
SUMMARY: Student loan balances climbed to $1.2 trillion at the end of 2014, and delinquencies are rising even as they fall for most other types of debt. In fact, students with the smallest balances are most likely to default. Judy Woodruff learns more from Megan McClean of the National Association of Student Financial Aid Administrators and William Elliott of the University of Kansas.
JUDY WOODRUFF (NewsHour): Even as the U.S. economy is picking up steam, there’s new research finding student loan debt is growing, and its burden lingers even longer than we realized.
Data from the New York Federal Reserve shows student loan balances climbed to almost $1.2 trillion at the end of last year. In fact, delinquencies are rising on student loans, even as they fall for most other types of debt, including mortgages and credit cards.
New research also finds that it is borrowers with the lowest balances, of $5,000 dollars or less, who are most likely to default.
Two experts join me now.
Megan McClean is director of public policy and advocacy at the National Association of Student Financial Aid Administrators. And William Elliott is an associate professor at the University of Kansas, where he studies asset building and education.
And we welcome you both.
MEGAN MCCLEAN, National Association of Student Financial Aid Administrators: Thank you.
JUDY WOODRUFF: So, Megan McClean, first of all, why is this happening?
MEGAN MCCLEAN: Thanks so much for having us this evening.
I think, generally speaking, what we’re seeing with the default situation is the aftermath of the economic downturn in 2008. There are a couple of things there from a broad standpoint. First and foremost, we always see more students going back to school during an economic downturn. So the borrower pool to begin with is broader.
And then you’re seeing I think folks still struggling in a job market, which can also contribute to defaults, and certainly a very troubling problem.
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