By Charlene Crowell –
As consumers struggle to cope with mounting debt, a new economic report from the Federal Reserve Bank of New York includes an unprecedented glimmer of hope.
Although debt for mortgages, credit cards, auto loans, and other purposes increased by billions of dollars in the second quarter of 2024, student loan debt decreased by $10 billion.
According to the New York Fed, borrowers ages 40-49 and ages 18-29 benefited the most from the reduction in student loan debt.
In a separate and recent independent finding, 57% of Black Americans hold more than $25,000 in student loan debt compared to 47% of Americans overall, according to The Motley Fool’s analysis of student debt by geography, age and race. Black women have an average of $41,466 in undergraduate student loan debt one year after graduation, more than any other group and $10,000 more than men.
This same analysis found that Washington, DC residents carried the highest average federal student loan debt balance, with $54,146 outstanding per borrower. Americans holding high levels of student debt lived in many of the nation’s most populous states, including California, Texas, and Florida.
The Fed’s recent finding may be connected to actions taken by the Biden administration to rein in unsustainable debt held by people who sought higher education as a way to secure a better quality of life. This decline is even more noteworthy in light of a series of legal roadblocks to loan forgiveness.
In response to these legal challenges, the Education Department on August 1 began emailing all borrowers of an approaching August 30 deadline to contact their loan servicer to decline future financial relief. Borrowers preferring to be considered for future relief proposed by pending departmental regulations should not respond.
If approved as drafted, the new rules would benefit over 30 million borrowers,…
Read the full article here
