The Graying of American Debt

Between 2003 and 2015, real aggregate debt in the hands of Americans aged 50 to 80 increased by 59 percent. Meanwhile, real debt held by Americans in their twenties and thirties was approximately flat. Using data from the Federal Reserve Bank of New York’s Consumer Credit Panel, we describe the extent of this debt increase and the distribution of debt growth by loan type. Real per capita home-secured debts held by older consumers show the steepest growth, though older borrowers have increased their obligations in all major debt categories. For long-held debts, these developments lead us to ask how such changes emerged: did older borrowers carry more debt through the Great Recession, after which access to consumer credit declined for new borrowers of all ages? Alternatively, have loan originations since the Great Recession favored older over younger borrowers? While our results indicate that the stock of long-held, home-secured debt sits largely with older borrowers, we also uncover evidence of a decisive tilt of new auto and mortgage originations away from younger borrowers and toward borrowers in their fifties, sixties, and even seventies. The motivation behind older consumers’ substantial new borrowing, often with long repayment terms, is the focus of ongoing research