First, the news: Total U.S. household debt climbed to $12.73 trillion in early 2017, pushing today’s debt level higher than the $12.68 trillion peak in 2008, according to the Federal Reserve Bank of New York.
Key differences exist between now and 2008, reducing the likelihood of another financial meltdown. The main thing: More of today’s debt is held by older, more creditworthy borrowers compared to 2008, according to the Fed.
“The growing debt level shows that many of the millions of Americans who struggled during the recession have sufficiently repaired their credit to qualify for loans,” The New York Times reports. “It also suggests a rising optimism about economic growth among banks and other lenders.”
While people in 2017 are handling their mortgages and auto loans better — with fewer foreclosures and defaults — the fact is that student loans are fueling the rise in debt.