CFPB: Total Student Debt Tops $1 Trillion, Tuition CPI Chart vs. Wage Growth, Housing CPI, Medical, All (FRED)

Oh man, remember when the New York Fed upgraded the total outstanding student loan balance to $870 billion with a delinquency rate of 10%, and noted how the delinquency rate excluding loans deferred until after graduation was at 21%? I just read at the Consumer Financial Protection Bureau's blog (via WSJ) that it "hit the trillion dollar mark several months ago". From the CFPB release, Too Big to Fail: Student debt hits a trillion:

"Our initial findings on the size of the private student loan market are sobering. When we add in the outstanding debt in the federal student loan program, it appears that outstanding student loan debt hit the trillion dollar mark several months ago – much larger than estimates from other recent reports. It seems that this market is too big to fail.

Unlike other consumer credit products, student debt keeps growing at a steady clip. Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us."


Tuition CPI, Housing CPI, Medical CPI, All CPI, Wage growth
Tuition CPI, Housing CPI, Medical CPI, All CPI, Wage growth (source)
So the question is, who backstops the debt if it craters like the mortgage market did in 2007-8? The U.S. government and Federal Reserve? Also, look at this chart showing student tuition inflation versus housing and the CPI, with PIMCO's Bill Gross saying college is a waste; and then see how the Khan Academy (60 Minutes videos) has disrupted education by offering free lectures on YouTube. Will there be enough employment available to pay off this debt?

I made a chart at the St. Louis Fed's site showing Student Tuition CPI, Housing CPI, Medical Care CPI, All Items CPI, and Wage growth since 1978. Tuition inflation outperformed every other measure (except wages during the mid-to-late 1990s), and it looks like it just broke below the 5% year-over-year growth level, which was the bottom during the mid-to-late 1990s. So, will the lower growth trend in tuition inflation continue due to a lower return on investment? View the student tuition chart with all of the variables here. Below is the chart without "wage and salary disbursements".


Student Tuition CPI YoY% vs. Housing, Medical Care, All
Student Tuition CPI YoY% vs. Housing, Medical Care, All (St. Louis Fed)

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