ST. LOUIS – According to a recent report to Congress from the Consumer Financial Protection Bureau, the $1 trillion-plus student-loan market is starting to resemble the failed mortgage market of a few years ago, and thus may spill over and threaten the nation's economic growth.
Average student debt per borrower grew from $16,000 in 2005 to $25,000 in 2012, according to a report from the Federal Reserve Bank of St. Louis. Additionally, the College Board found that about 66 percent of graduating seniors in 2011 had student loan debt. Student loan balances are expected to continue to grow rapidly, and these rising levels threaten the upward mobility of younger Americans, millions of whom can’t obtain a college degree without taking on that debt.
A Nov. 18 symposium at the St. Louis Fed will explore the issue and ways to address it. At the event, titled “Generation Debt: The Promise, Perils and Future of Student Loans,” participants will take a look at the reality and future of student loans in the United States. The event will include Consumer Financial Protection Bureau Assistant Director and Student Loan Ombudsman Rohit Chopra, who oversees student loans on behalf of the CFPB.
Also participating in the symposium are national higher education expert Sandy Baum of George Washington University; William Elliott of the University of Kansas; Jen Mishory of Young Invincibles; Gary Ransdell, president of Western Kentucky University; Caroline Ratcliffe of the Urban Institute, and leading researchers from the Federal Reserve system. Also included are organizations offering real and practical solutions to help students and families manage burdensome student loans, including Paul Combe, president of American Student Assistance.
A draft agenda and registration are available at www.stlouisfed.org/hfs. The event is open to members of the media, who should contact Laura Girresch at 314-444-6166 or email@example.com if they’d like to attend.
The symposium is part of the ongoing mission of the St. Louis Fed’s Center for Household Financial Stability to conduct research and convene practitioners and policymakers around promising ideas to rebuild the balance sheets of struggling American families.
“We can’t fully understand family balance sheets without considering the latest research on student loans, especially in light of their rapid growth and potential threat to the economic recovery,” said Ray Boshara, who directs the St. Louis Fed’s Center for Household Financial Stability, which is organizing the event. “But we must also consider promising alternatives to financing higher education in the U.S. At this forum, we’ll do both.”