The federal lending program designed to make college education available to everyone is creating a pile of debt so large it is fanning worries that it has become too easy to borrow too much, the Wall Street Journal reported today. U.S. student-loan debt rose by $42 billion, or 4.6 percent, to $956 billion in the third quarter, the Federal Reserve Bank of New York said yesterday. Payments on 11 percent of student-loan balances were 90 or more days behind at the end of September, up from 8.9 percent at the end of June, a rate that now exceeds that for credit cards. Delinquency rates for all other consumer-debt categories fell or were flat. Nearly all student loans—93 percent of them last year—are made directly by the government, which asks little or nothing about borrowers' ability to repay, or about what sort of education they intend to pursue. Rising student-debt burdens and stories about students and parents drowning in debt are focusing attention on risks to the government and borrowers.
