The Wall Street Journal is reporting that according to the latest figures from the Federal Reserve, student loan debt has officially surpassed credit card debt in the United States. In the month of June, Americans owed $826.5 billion in revolving credit compared to the $829 billion they owed in both federal and private education loans.
“The growth in education debt outstanding is like cooking a lobster,” publisher of FinAid.org and FastWeb.com Mark Kantrowitz told 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.”
Revolving credit, the majority of which is credit card debt, hit a high of $975.7 billion in September 2008, according to data from the Federal Reserve. As credit card companies raise minimum payments, consumers who hold both card accounts and student loan debt are more likely to pay off the money to issuers. Higher interest rates on credit cards make repayment urgent, the Journal notes.
Consumers struggling to repay student loans and credit cards can consider debt consolidation. By condensing a number of credit card or loan interest rates, borrowers can lower their monthly payments.