Charting 17 Years of American Household Debt

The coronavirus pandemic is changing consumer habits in a lot of ways. In fact, according to recent surveys, people say they will use additional government stimulus payments to pay off personal debt. This got us thinking about how total household debt has changed across the U.S. over the last several years.

US household debt chart

  • Student loan debt has exploded over the last 17 years, growing some 546% from 2003 through 2020.
  • Auto loans have also increased substantially, growing by 114% as the average price of new cars and longer loan terms enable Americans to take on more debt than ever before.
  • Every category of consumer debt has increased in the last several years with the exception of other miscellaneous types of debt, which decreased 12% since 2003.
  • Many Americans say they intend to pay down their debts with a third round of direct government stimulus hitting bank accounts starting March 2021.

We found the data for our visualization from the Federal Reserve Bank of New York. Starting with the first quarter of 2003, we plotted out the overall relative percentage change in household debt based on different categories. This allows you to easily and quickly see how the relative debt load for American households has changed over the last several years, and it provides a few clues as to where things are headed in the future.

The most obvious story our visualization tells is how student loans exploded as a portion of household debt. From 2003 through the end of 2020, student loans increased by some 546%. This means that as a relative share of total household debt, student loans increased by more than five times their original starting balance. And there are lots of things happening at the federal level in response to the rise of student loans. President Trump initially suspended student loan payments and the accumulation of interest, which President Biden continued until September 2021. Democrats recently made any future cancellation of student debt income tax free. All of this suggests President Biden may directly cancel some amount of student loan balances in the future.

Student loan debt has shot up over the last several years, and other types of household debt have also seen increases. Auto loans make up the second highest growth in relative household debt, topping 114% of their relative share compared to 2003 levels. There are a few reasons why car loans are going up. The average price of a new vehicle now often tops $40,000, and some lenders are willing to write loans for up to 8 years. Mortgages are also higher as a relative share of household debt at 103% of 2003 levels. Home equity loans accelerated in the run up to the housing crisis until 2009, when they started a long downward trend. Credit card debt meanwhile has remained relatively flat, rising slightly in the lead up to the Great Recession before declining and rising again. And other types of loans, such as unsecured personal loans or payday advances, are likewise down about 12% from their 2003 baseline.

Not all types of debt are bad. Sometimes taking out a loan is the best way to spread the cost of an expensive purchase over a long period of time. And it always pays to shop around for the best rates. We have a lot of resources to help you get started, like our guide to how student loans work, how to get prequalified for an auto loan, the best personal loans for paying off credit card debt, and how to understand your mortgage.

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