Student debt continues alarming rise

Since 2000, annual tuition at public universities has doubled. Now, many college graduates find themselves working just to pay off their student loans. / CBS

(MoneyWatch) Unlike other types of consumer debt, which have been declining or holding steady, student loan debt continues to climb, according to the latest quarterly study by the Federal Reserve Bank of New York.

In the third quarter of 2011, student loan obligations grew 2.1 percent as this debt reached a balance of $870 billion. In comparision, the balances are significantly lower on credit card debt ($693 billion) and auto loans ($730 billion).

The Federal Reserve pulled the loan figures from data from Equifax credit reports. More than 15 percent of adults, or 37 million Americans, have outstanding student loans.

One of the most disturbing aspects of the Federal Reserve report is the number of borrowers who are behind on their student loan payments. More than 14 percent of borrowers have failed to pay on time. The balances of these borrowers represent 10 percent of the outstanding college debt.

Who's borrowing?

Not surprisingly, college debt is predominantly a young person's burden. As you can see from the chart below, the largest number of borrowers are under 30 years of age. Americans who are 39 or under represent more than 66 percent of borrowers.

More important is the difference between the average student loan balance and the median balance. The average student loan balance was $23,300, according to the Federal Reserve. The median balance, however, was significantly less -- $12,800. This indicates a small fraction of people have extremely high balances. 

Given the level of college debt, the Federal Reserve concluded that the student loan burden will remain a critical policy focus for generations to come.

[StudentLoanKiller]

It's going to be interesting as this generation gets older. The more they have more debt than any previous generation at this age, and have no equity in that debt. Student loans can't be foreclosed on or repossessed.

I think a lot of the problem starts with the schools themselves. What reason is there for tuition rising at the rate it is? If they were more competitively priced then the debt levels probably wouldn't be so bad.

I'm working on www.studentloankiller.com to help people with student debt find ways out of debt and into financial freedom because this problem is so scary.

[Moravecglobal]

University of California campus Chancellor squanders tax funding. It is past time for University of California Regent Chairwoman Lansing to deal with the economic realities that the Board of Regents cannot escape. UC Berkeley Chancellor Birgeneau picks the pockets of Californian students and their parents clean. Public Cal. now more expensive than Harvard and Yale. (The author has 35 years' consulting, has taught at Cal where he observed the culture & ways of senior management & was not fired)

UC Berkeley Birgeneau ($450,000 salary) has forgotten he is a public servant, steward of the public money, not overseer of his own fiefdom. Tuition fee increases exceed national average rate of increase; On an all-in-cost Cal. ranked # 1 most expensive public university; Recruits (using California tax $) out of state & foreign affluent $50,600 tuition students who displace qualified instate applicants from Cal; Spends $7,000,000 + for OE consultants to do the work of his management team (prominent East Coast university accomplishing same at 0 cost); When procuring OE consultants failed to receive alternative proposals; Pays ex Michigan governor $300,000 for several lectures; Tuition to Return on Investment drops below top 10; QS academic ranking falls below top 10.

In tough economic times, unpleasant decisions must be made. UC Board of Regents Chair Lansing must oust Chancellor Birgeneau
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