It’s that time of year again: a fresh start for college students as they head back to campus. But, as they hit the books, alumni now in the workforce continue to default on student loans.
The New York Federal Reserve released new data from their quarterly household debt survey that shows more Americans are defaulting on their student loans, as household debt continues to increase. The debt is comprised of 35 percent unpaid student loans.
Since 2012, unpaid student loans have significantly increased. Now, they surpass unpaid credit cards, auto loans and mortgages. Currently, outstanding student loan debt totals $1.48 trillion, with 10 percent of this being 30 or more days past due.
For years, the government has greatly underestimated, or simply failed to realize, the growth student loans would endure. Unlike car loans or a mortgage on a house, student loans can’t be repossessed if payments aren’t made.
This increase in Americans who are defaulting on student loans, and the toll it takes on taxpayers, is important to keep in mind as some prominent politicians continue to push “student loan forgiveness” and “free college”–as both would be detrimental to the economy.