Student debt continues alarming rise

Since 2000, annual tuition at public universities has doubled. Now, many college graduates find themselves working just to pay off their student loans.

(MoneyWatch) Unlike other types of consumer debt, which have been declining or holding steady, student loan debt continues to climb, according to the latest quarterly study by the Federal Reserve Bank of New York.

In the third quarter of 2011, student loan obligations grew 2.1 percent as this debt reached a balance of $870 billion. In comparision, the balances are significantly lower on credit card debt ($693 billion) and auto loans ($730 billion).

The Federal Reserve pulled the loan figures from data from Equifax credit reports. More than 15 percent of adults, or 37 million Americans, have outstanding student loans.

One of the most disturbing aspects of the Federal Reserve report is the number of borrowers who are behind on their student loan payments. More than 14 percent of borrowers have failed to pay on time. The balances of these borrowers represent 10 percent of the outstanding college debt.

Who's borrowing?

Not surprisingly, college debt is predominantly a young person's burden. As you can see from the chart below, the largest number of borrowers are under 30 years of age. Americans who are 39 or under represent more than 66 percent of borrowers.

More important is the difference between the average student loan balance and the median balance. The average student loan balance was $23,300, according to the Federal Reserve. The median balance, however, was significantly less -- $12,800. This indicates a small fraction of people have extremely high balances. 

Given the level of college debt, the Federal Reserve concluded that the student loan burden will remain a critical policy focus for generations to come.