The new U.S. agency overseeing most loan products has made that estimate after the “first major effort” to analyze the private student loan market, which falls under the bureau’s new authority, according to Rohit Chopra, the CFPB’s student loan ombudsman.
The CFPB’s initial findings on the size of the private student loan market are “sobering,” Chopra said.
When factoring in the outstanding debt from federal student loan programs, it appears that outstanding student loans overall hit $1 trillion several months ago – a much larger estimate than one provided in a recent, much-publicized report, Chopra said.
That puts student loan debt higher than the nation’s overall credit card balance, which the Federal Reserve put at $880.9 billion as of January, according to the Fed’s most recent update.
Unlike other credit products, student debt keeps growing at a steady clip, Chopra said at a conference hosted by the Consumer Bankers Association this week in Austin, Texas.
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,” Chopra said. “If current trends continue, there will be consequences not just for young people, but for all of us.”
Federal student loan debt isn’t growing just with new originations, it is surging even for many who have left school, with so many borrowers unable to keep up with interest payments, according to data from the Department of Education.
This summer, the CFPB will release the results of its study on the private student loan market.