Editors' pick: Originally published Aug. 5.

Negative wealth is on the rise in the United States and according to the New York Federal Bank of Reserve, student loans have become a predictor of shrinking assets of many families. Households have negative wealth when debts are greater than total cash and non-cash assets.

About 15.1% of U.S. households have total wealth at or below zero, while another 14% are well below the zero or break-even threshold, according to an August 1, 2016 New York Fed report, "Which Households Have Negative Wealth?"

"We find that the heads of such households are younger than their counterparts in households with non-negative wealth—an average age of 43 compared to 51," said Olivier Armantier, assistant vice president of the New York Fed's research and statistics group who, with senior vice president of research and statistics Wilbert Van der Klaauw wrote the report. "Moreover, we find the association between having negative wealth and the head of household's age to be stronger for those with a college degree and especially so for those with postgraduate degrees." They added that it is likely that steady growth and borrowing, combined with a very slow rate of repayment, "has materially contributed and will contribute to negative household wealth and wealth inequality."

The New York Fed's analysis is based on its 2015 Survey of Consumer Expectations, which includes data on respondents' assets, debt and expectations from 1,300 respondents.

Households with the highest amounts of wealth--dubbed positive wealth by the New York Fed--were likely to have it concentrated in housing. Those with the greatest amount of negative wealth were found to have student loans.

The descent into negative wealth hits student loan borrowers in middle income range households particularly hard. Nearly half—47%--of the total debt of households with between $47,500 and $52,000 are in negative wealth territory had student loans. For households with between $12,500 and $46,300 in negative wealth, college loans made up about 40% of total debt. In households with the smallest amounts of negative wealth, most debt was held in credit cards. This group includes older Americans who've had their mortgage burning parties and own their homes free and clear.

An analog to the negative wealth phenomenon concerns the credentials students loans are used to finance; in terms of value, are they slipping into negative territory also? Diverting resources, whether in the form of cash or loans or years lost to study rather than paid employment lead some to fear credential inflation, where students are left with degrees worth less than they originally anticipated.

These include traditional graduate degrees--MAs, Ph.D.s and law school diplomas. For example, between 2008, the start of the Great Recession, and 2014, the median salary for newbie lawyers declined over 20% in real dollars according to the Washington, D.C.-based National Association of Law Placement (NALP), while the cost of attendance increased.

Even if a household's wealth experiences a plunge into negative territory that is temporary, the growth of this phenomenon does not augur well for the future, Recent grads earning entry-level salaries leave them ill-positioned to cope with five figure loan balances that bleed into six figures if they end up in grad school.

Mark Kantrowitz, publisher and vice president of strategy at Cappex.com, noted that when people have to devote a substantial amount of their income to paying off student debt, it means they're less capable of saving money to pay for retirement or put a down payment on a house. But he said "the alternative scenario, where those individuals don't take out loans, has to be considered as well." Paying off those loans could foreclose on the possibility of being able to acquire that most valuable of assets--home ownership.

The Urban Institute's 2015 study noted that since the Great Recession, household formation patterns have been changing. Their 2015 study forecast that renters will outpace buyers for the next 15 years. When Millennials reach their prime home buying age in the 2030s, 38% will own homes compared to 46% of Boomers in the 1990s. A nascent revenue source for some retired Boomers could be renting to Millennials.