What effect do student loans typically have on consumer debt?

Student loans generally have a substantial effect on consumer debt by significantly increasing total debt amounts. This is primarily because student loans can accumulate large principal amounts, often exceeding those of other types of consumer debt, such as credit cards or personal loans.

When individuals pursue higher education, they frequently take on student loans to cover tuition, fees, and living expenses, and these loans can be substantial. As borrowers complete their education and enter the job market, they may actually face challenges in managing these debts alongside other financial obligations.

Furthermore, the high cost of education and the corresponding student loan debt can burden borrowers for many years, affecting their ability to save or invest in other areas of their lives. This consolidated debt often contributes to a higher overall debt-to-income ratio, which can impact future borrowing options, credit scores, and financial decisions. Thus, student loans are a major factor in increasing total consumer debt, which has a ripple effect on individuals' financial health and capabilities.