The Graying of American Debt

Brown, Meta; Lee, Donghoon; Scally, Joelle; Strair, Katherine; Van der Klaauw, Wilbert

Discussion Paper

The Graying of American Debt

Abstract: The U.S. population is aging and so are its debts. In this post, we use the New York Fed Consumer Credit Panel, which is based on Equifax credit data, to look at how debt is changing as baby boomers reach retirement age and millennials find their footing. We find that aggregate debt balances held by younger borrowers have declined modestly from 2003 to 2015, with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt. Debt held by borrowers between the ages of 50 and 80, however, increased by roughly 60 percent over the same time period. This shifting of debt from younger to older borrowers is of obvious relevance to markets fueled by consumer credit. It is also relevant from a loan performance perspective as consumer debt payments are being made by older debtors than ever before.

Keywords: Repayment; Aging; Household debt;

JEL Classification: D1; R3;