A new report from the Federal Reserve released on Monday showed that Americans racked up less credit card debt in the 4Q of last year, as compared to the 3Q. That’s a good thing. However, total household debt actually hit a new record in February of $3.13 trillion (not including home mortgages).

So how can household debt rise when many families are reducing their debts and spending less on their credit cards? The answer: Student loans.

Student loans, which are included in household debt, have been soaring during and after the Great Recession. Last month, outstanding student loans topped $1 trillion for the first time. According to the Fed, the average college student in the US has $33,607 in outstanding loans. That compares to the average household debt of $15,191.

So the average student has over twice as much debt as the average household. Today, we’ll look at why this is happening. You may be surprised.

Mortgage debt is still by far the biggest category of debt in the United States, totaling over $7 trillion. But as more people have invested in college, the total amount of outstanding student loan debt now exceeds auto loans and credit card debt.

This chart does not include 2013 when outstanding student loans reached the $1 trillion mark.

There are several reasons why student loan debt has skyrocketed in recent years. First, college costs are out of control, rising at a rate of roughly 7% per year for decades.  Since 1985, the Consumer Price Index has risen apprx. 115% while the college education inflation rate has risen over 500%.

Second, more young adults are attending college than ever before. Part of that is simply a result of our growing population. But in recent years, more and more young adults are attending college because they cannot get a job that will support them.

So they are flocking to low-interest student loans that allow them to go to college, gain some skills and await what they hope will be a real economic recovery. With an average of $33,600 in student loan debt, it remains to be seen if that bet will pay off.

Guess Who’s on the Hook

So despite the shortage of high-paying jobs, young adults continue to run like lemmings into universities and colleges, even with slim hopes of having a good career once they graduate. As the latest Fed data show, not only are student loans the largest consumer debt being accumulated by American households today, but the number of delinquencies on that debt is also higher than at any time in history.

As of the end of last year, a record high $124.3 billion (11.5%) of student loans were 90 days or more delinquent. The Fed admits that this estimate is likely understated. More than 38 million Americans have outstanding student loan debt, including many who graduated years ago.

Most Americans are not aware of this, but taxpayers are on the hook for this student loan debt as never before, thanks to the federal takeover of student loans which was enacted along with ObamaCare in 2010. On March 30, 2010 President Obama signed the Health Care and Education Reconciliation Act of 2010, which made the government the primary distributor of student loans.

This student lending overhaul ended the previous program that subsidized banks and other financial institutions for issuing loans, instead allowing students to borrow directly from the federal government. Since July 1, 2010, all new federal student loans have been delivered and collected by private companies under performance-based contracts with the Department of Education – for better or worse.

My point today is that many young people are taking out student loans not for education that boosts their employment prospects but for the chance to take out low-cost loans, sometimes with little intention of getting a degree.

As the Wall Street Journal recently noted, the government performs no credit checks for most student loans. It’s no wonder then that delinquency rates are soaring!