“Jumbo shrimp” sounds contradictory but can be quite enjoyable. “Jumbo debt”? Not so much, especially for students.
There’s nothing inherently wrong with large student loans, and historically the default rate has been low on such loans. People who borrow large sums of money usually go for advanced degrees that translate into higher salaries. However, a February 2018 study by the Brookings Institution found that large-balance student loan borrowers have increased dramatically in recent years – and the typical profile for such borrowers has changed.
In 1992, only 2% of student loan borrowers owed over $50,000 upon leaving school. In 2014, that number rose to 17%. Just over half of total student loan debt is held by this small percentage of large-balance borrowers.
Default rates are low in this group (typically around 4%), but the consequences are large. Student loan borrowers with balances over $50,000 account for almost 30% of defaulted student …