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It is no surprise that many adults are consumed by their credit card debt. What is a surprise is the rate at which student loan debt and student loan consolidation is now surpassing debt accrued from credit cards. Consumers, it seems, owe more now for student loans than they do for outstanding credit cards.

The Evidence

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According to the Federal Reserve’s statistics from June 2010, Americans now owe a revolving credit total of around $826.5 billion. This revolving credit is primarily debt from credit cards.’s Mark Kantrowitz, the total for outstanding federal and private student loans, including student loan consolidation is $829.785 billion. While the growth in debt for student loans accrues slowly, many people do not notice how quickly that slow growth ads up until it is too late. It is estimated that the total outstanding student debt for student loan consolidation includes $605.6 billion for federal student loans with the remaining $167.8 billion for private student loans. It is also estimated that there is an additional $300 billion worth of debt from federal student loans from the last four years alone.

The Reason

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This in part because credit card companies have raised minimum monthly payments in an attempt to get back their money and have credit cards paid off while student loan companies have not.  Credit card companies have also cut off revolving lines of new credit in an attempt to cut back on the unpaid debt. Revolving credit had reached an all-time high in September of 2008. Because of the higher interest rates attached to credit cards compared to student loan consolidation, people are more prone to paying off the credit card debt first and letting the lower  interest on the student loans accumulate. With federal student loans, the options for forbearance have been utilized extensively for many recent graduates and those still paying off student debt. However, this means that while jobs have been lost and loans are put off, the interest is still collecting and adding to the overall total.

The Need to Prepare

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If you haven’t already started saving for college, then you could find yourself in the very rough position of not being able to afford the rising rates of tuition and housing, thus forcing you to forego a college education or rely heavily upon student loans. That in mind, your college education will cost you at least double what it would cost someone who has already saved for college because of rising interest rates associated with student loans for college. The average person is more likely to borrow money to go to school now more than ever, and more likely to borrow more money than before in order to cover expenditures that might have otherwise been covered by a credit card such as tuition, additional lab fees, housing, books, etc… As these fees continue to rise, people are continuing to take out more and more money to make up the difference, leaving them in a position of needing student loan consolidation, especially if faced with unemployment. Therefore, the overall cost of education is continuing to increase while the length of unemployment is rising.


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Student loan consolidation is a necessary step for many people are facing a rising student loan debt and credit card debt. The importance of planning early to prevent becoming part of this statistic cannot be stressed enough. By properly preparing for college and taking the fiscal steps which are necessary to cover your growing expense possibilities in college, students can rest assured that their student debt will not be a part of those statistics.