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News Link • Government Debt & Financing

Barely Half of Student Loans Are Being Repaid


The US Department of Education's new data on the status of outstanding student loans show that outright defaults are up. However, their press release — and much of the accompanying media coverage — instead played up a decline in loan delinquencies. The increase in defaults is worrisome and needs to be addressed by Congress.

The total amount of outstanding direct student loans stood at $855 billion at the beginning of the first quarter of 2016, distributed among over 30 million recipients. (This total does not include loans still outstanding under the now-discontinued FFEL program, which guaranteed private-sector student loans.) The total direct loan amount outstanding is up roughly 15 percent over a year ago, doubtlessly the result of relentless tuition increases.

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