Student debt increased by $31 billion to a record $1.1 trillion in the first quarter of 2014, the Federal Reserve Bank of New York reported Tuesday.
Total consumer debt stood at $11.65 trillion in the quarter, still 8 percent below its 2008 peak, according to the New York Fed data. In recent months, student debt has eclipsed other kinds of consumer credit other than mortgages, including credit card debt and auto loans.
In a separate analysis released Thursday, New York Fed researchers noted that student borrowers continue to lag in home and auto purchases, even though both housing and auto sales improved significantly over the course of 2013.
Analysts noted that the share of 25-year-olds with student debt continued to increase in 2013, and the group's average student loan balance also rose, to $20,926 — nearly 70 percent of all their debts.
Although historically people with student loans are more likely to take out a mortgage than those who do not have student debt, "student loan holders were still less likely to invest in houses than nonholders in 2013, despite the marked improvements in the aggregate housing market," the researchers wrote.
A similar story is true for car purchases, although the trend is less pronounced. Those with and without student loans are now equally likely to take on auto loans. "It is surprising that [comparatively skilled] student loan holders have still not shown signs of accelerating auto consumption," wrote the Fed researchers.
That the high level of student debt might be holding back a stronger recovery, particularly by postponing many Americans' home-buying plans, has recently become a major concern for top policymakers.
Federal Reserve Chairwoman Janet Yellen warned in an appearance on Capitol Hill Thursday that "the debt loads certainly are high enough that they may play a role in, for example, making it hard for people to buy first homes, to build a down payment."
Student debt is countercyclical, meaning that it increases for various reasons when the economy is bad and shrinks during booms, making the total level of student debt unlikely to pose a systemic risk the way that mortgage debt did in 2008. Yellen and others, however, have suggested that the heavy student debt burdens on young borrowers could be an impediment to stronger recovery.
The New York Fed's data on consumer credit is taken from the credit reporting agency Equifax. A separate report on consumer credit released last week by the Federal Reserve Board of Governors showed student debt higher, at $1.25 trillion.