The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through January 2019.
In January, consumer credit increased at a seasonally adjusted annual rate of 3.5% from the previous month, with revolving debt1 decreasing by 3.3% and nonrevolving debt2 increasing by 5.8 percent. Consumer credit totaled $4.2 trillion on a seasonally adjusted basis, with $1.1 trillion in revolving debt1 and $3.1 trillion in nonrevolving debt. This is an increase of $12.0 billion from the previous month, with revolving debt decreasing by $3.0 billion and non-revolving credit increasing by $15.1 billion.
The data show that government-issued student loan debt, a form of non-revolving credit, increased greater than revolving consumer credit on a non-seasonally adjusted basis3. Furthermore, among all types of non-revolving consumer credit, government student loan debt increased the greatest, by $27.9 billion (NSA). As explained in a prior analysis (in turn referencing a study by the Federal Reserve), student debt is one of the main barriers to homeownership in the United States. The figure above also shows that the spike in government student loan debt is not only a seasonal trend but also climbed intensely following the Great Recession.
- Revolving credit plans are largely composed of credit card debt but also include home equity lines of credit (HELOCs). These may be unsecured or secured by collateral and allow a consumer to borrow up to a prearranged limit and repay the debt in one or more installments. The G.19 Consumer Credit report excludes HELOCS and home equity loans, as they are secured by real estate.
- Nonrevolving credit is closed-end credit extended to consumers that is repaid on a prearranged repayment schedule and may be secured or unsecured.
- The G.19 report states that the federal government originates consumer credit solely in the form of nonrevolving student loans through the Department of Education. The federal government sector on the G.19 includes student loans issued through the William D. Ford Direct Loan Program and the Perkins Loan Program, as well as the Federal Family Education Loan Program loans that the government purchased under the Ensuring Continued Access to Student Loans Act.