Consumer Financial Protection Bureau finds student debt higher than previously thought

The Consumer Financial Protection Bureau released findings recently to the Consumer Bankers Association conference suggesting estimates of student debt published by the Federal Reserve Bank of New York were far too low. Debt recovery services are being mobilized on a large scale to recover funds for both federal and private lenders, who have noted that an ever-increasing number of clients cannot keep up with student loan payments. The FRBNY's Consumer Credit Panel released a report in early March stating that the total outstanding balance of student loan debt was approximately $870 billion. However, a more recent blog from experts at the Consumer Financial Protection Bureau revealed that student loan debt surpassed $1 trillion months ago, a 16 percent increase from the earlier finding. The blog noted that debt accrued from student loans is only growing, citing that college students took out a total of $117 billion in only federal loans in 2011. Debt is also growing because many graduates find themselves unable to keep up with payments once they have left school, resulting in a snowball effect of interest and increased payment amounts. The Wall Street Journal reported that CFPB officials explained the difference in debt estimates, saying that their analysts consulted the lenders themselves, rather than relying solely upon consumer credit reports.