The nation’s outstanding student-loan debt exceeded the amount of its credit card debt in June, the publisher of award-winning website Finaid.org, announced in a Fastweb.com press release Wednesday.
The vast majority of the country’s $830 billion in student-loan debt comes from federal loans, with $665 billion coming from federal student loans and $168 billion from private student loans, according to the press release. The total exceeds the $826.5 billion in credit card debt, according to June’s Federal Reserve data.
“Education debt probably has almost as much of an impact on consumer behavior as credit card debt,” said Finaid.org publisher Mark Kantrowitz in the press release. “Consumers should accelerate repayment of the most expensive debt first, which is usually credit card balances and private student loans. The most expensive debt is the debt with the highest interest rate.”
Thomas Melecki, UT’s director of Office Student Financial Services, said the 1980s-era federal budget and policy decisions to make student loans the most relied upon form of student financial aid has lead to today’s current problems.
“I personally believe that this was because it was less expensive for the federal government to run programs that deliver loan dollars instead of grant dollars,” Melecki said.