Fed report: Student loan debt at record $904B

Student-loan debt rose to a record $904 billion in the first quarter, even as other forms of consumer debt declined, a government report said Thursday.

Student loan debt rose 7.7 percent from a year earlier and has more than tripled since the first quarter of 2003, the Federal Reserve Bank of New York said in its latest "Household Debt and Credit" report.

By contrast, credit-card debt fell in the first quarter to $679 billion from $696 billion a year earlier.

Since 2010, student-loan debt has surpassed credit-card debt as the second-highest form of consumer debt. Number 1 is mortgages.

Graduates receiving a bachelor's degree this year had average student-loan debt of $28,720 versus $18,271 in the 2002-03 school year, according to the college financial information website FinAid.org.

An anemic job market has limited students' ability to find employment to repay their loans. The percentage of student loans 90-plus days in arrears rose to 8.69 percent in the first quarter, from 6.13 percent in 2003, the New York Fed said.

Frustration over rising debt and weak job prospects helped spawn the Occupy Wall Street protest movement last year.

The debt problem could have far-reaching consequences for consumer spending locally and nationwide, said Pearl Kamer, chief economist of the Long Island Association, the Island's largest business group.

"If you have to repay your loans, you can't spend it elsewhere," she said. "So many college students have to postpone marriage, have to postpone buying a home and have to cut their consumption in other areas. So the economy in general suffers."