Student Loan Debt Clock

This Student Loan Debt clock reports an estimate of current student loan debt outstanding, including both federal and private student loans. This student loan debt clock is intended for entertainment purposes only. The actual total debt outstanding demonstrates more volatility at the beginning of each semester, when most student loans are disbursed. (Most colleges are required to disburse federal education loans in two installments per period of enrollment.)

In June 2010, total student loan debt outstanding exceeded total credit card debt outstanding for the first time. The seasonally adjusted figure for revolving credit in the Federal Reserve’s G.19 current report was $826.5 billion in June 2010. (Credit card debt represents as much as 98% of revolving credit.) Revolving credit started declining in September 2008 when it reached a peak of $975.7 billion. The decrease is probably due a combination of higher minimum payments on credit cards, which were increased to 4% from 2%, lower credit card limits and tighter credit underwriting. Student loan debt, on the other hand, as been growing steadily because need-based grants have not been keeping pace with increases in college costs. Federal student loan debt outstanding reached approximately $665 billion and private student loan debt reached approximately $168 billion in June 2010, for a total student loan debt outstanding of $833 billion. Total student loan debt is increasing at a rate of about $2,853.88 per second.

Note that these figures do not include capitalized interest on the total outstanding for federal education loans. When federal agencies publish debt figures, those figures usually include only the portion of the original principal balance remaining. This might not matter much for credit cards, auto loans and mortgages, but it has a much greater impact on education loans. Students routinely defer repaying student loans during the in-school and grace periods by capitalizing the interest. This increases the total federal student loan debt outstanding by about 6% to 7%, or about $50 billion.

If one were to include capitalized interest, total federal and private student loan debt probably hit the $1 trillion milestone in late 2011. But since there is not a reliable source of data concerning capitalized interest, the student loan debt clock does not include it. The student loan debt clock reached the $1 trillion milestone on May 8, 2012 at about 6:40 am ET.

Practical tips for minimizing debt and reducing the cost of education financing include: