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More student loans boost consumer credit $11.4B

Associated Press Modified: November 7, 2012 at 4:15 pm •  Published: November 7, 2012
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During the same period, student loan debt has increased dramatically. The category that includes auto and student loans is 21.2 percent higher than in July 2008.

In the April-June quarter, student loans totaled $914 billion, according to a report from the Federal Reserve Bank of New York. That is nearly 50 percent higher than the July-September quarter of 2008.

Much of the increase in student loans is a reflection of high unemployment, which has led many Americans to go back to school. The unemployment rate was 7.9 percent in October. While that's down from the post-recession peak of 10 percent, it's still well above the roughly 6 percent rate that many economists equate with healthy job markets.

Overall, Americans' finances have been improving. Low interest rates are also helping. The percentage of after-tax incomes that Americans are using to pay interest on all debt, including mortgages, fell to 10.7 percent in the second quarter. That's down from 14 percent at the end of 2007, when the recession began.