A graduation cap with money symbolizes student loans
A graduation cap with money symbolizes student loans - 
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Kai Ryssdal: All right, here's another economic milepost: For first time, student loans in this country have overtaken credit card debt. Americans owe more to private student lenders and the federal government than they owe credit card companies.

Scary, but not necessarily a bad thing, as Amy Scott reports from the Marketplace Education Desk at WYPR in Baltimore.

Amy Scott: As of June, Americans owed about $826 billion in revolving credit. Most of that is credit card debt. Our student loan bill totaled about $830 billion.

That's according to Mark Kantrowitz. He publishes the financial aid website Finaid.org. For one thing, he says more people are going to college.

Mark Kantrowitz: The number of financial aid applications has gone up by about 20 percent year over year. And more of those families have greater financial need, due to unemployment and other impacts of the economy on their personal finances.

Families are also borrowing more because college is getting more expensive. And Kantrowitz says students are now more likely to get loans from the federal government instead of grants that don't have to be paid back. But there's another big reason for the debt shift: People are paying down their credit cards.

Economist Julia Coronado with BNP Paribas says that's a mixed blessing.

Julia Coronado: In the short run, it means that we have a very slow and painful recovery, because consumers are being more conservative. But in the long run, that means that their balance sheets will be stronger and their saving foundation won't rely just on rising stock prices or rising house prices.

So which kind of debt is better? Credit card debt tends to cost more, in the form of higher interest rates. Student loans are much harder to get rid of in bankruptcy. But Coronado says the investment usually pays off. Studies show people who finish even some college earn a lot more than those who don't go at all.

I'm Amy Scott for Marketplace.

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Follow Amy Scott at @amyreports