The amount of unpaid student loan debt in the United States has doubled in the past 10 years and now stands at $1.465 trillion, a new record.
Individuals who took out a student loan in 2012, though, are having a much harder time making their payments that individuals who took out loans in any other year, for some reason.
During the past decade, individuals who took out a student loan in 2012 have a cumulative loss rate of 8.5%, well above any other year, according to a published report.
Perhaps those individuals are having a tougher time because they are younger and just getting established in their careers, meaning their salaries are not yet at a point where they can cover their student loan payments and everything else they need to pay for in order to survive.
As well, concerns about a recession on the horizon, which would hurt younger individuals more and cause a rise in the youth unemployment rate may send even more student loan borrowers into default, according to the report.
“Over 90% of student loans are guaranteed by the U.S. Department of Education, meaning that if a recession causes a rise in youth unemployment and triggers mass defaults, this contingent liability could prove burdensome for the U.S. government budget,” said Paul Della Guardia, economist at the Institute of International Finance in emailed comments.
More than 2.7 million borrower owe at least $100,000 in unpaid student loans, according to the analysis.