WASHINGTON, D.C. — For the first time, Americans owe more in student loans than they do in credit card debt, according to a report in The Wall Street Journal. While citizens cumulatively owe about $826.5 billion in revolving credit, mostly credit card debt, they owe a total of $829.8 billion in government and private student loans, The Journal said.
The figures were reported by Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, The Journal reported.
"The growth in education debt outstanding is like cooking a lobster," Kantrowitz said, according to The Journal. "The increase in total student debt occurs slowly but steadily, so by the time you notice that the water is boiling, you’re already cooked."
Kantrowitz estimated that there is $605.6 billion in federal student loans outstanding and $167.8 billion in private loans, The Journal reported. Of that, about $300 billion in federal student loan debt was generated in the last four years.
Consumers with both credit card debt and student loan debt tend to pay the credit card balance first, since it typically carries a higher interest rate, according to The Journal. The report also noted that college tuition is increasing during an economic downturn, resulting in more parents and students seeking loans to cover education costs.
Student loans typically cannot be forgiven through bankruptcy, The Journal reported.
The Wall Street Journal, "Student-loan debt surpasses credit cards," Aug. 9, 2010
Mackinac Center for Public Policy, "Analysis: Dangers of Status Quo Budgeting in Higher Education," Aug. 2, 2010