In a rare moment of disagreement among major federal agencies, the Consumer Financial Protection Bureau has found in its preliminary research of student debt that the problem is even greater than they at first surmised. A speech before the Consumer Bankers Association by Rohit Chopra, the student loan ombudsman for the agency, termed the student debt market “too big to fail,” with a total outstanding debt of well over a trillion dollars, far more than previous estimates.

Unlike other consumer credit products, student debt keeps growing at a steady clip. Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us.

According to data from the Department of Education, federal student loan debt isn’t growing just with new originations – with so many borrowers unable to keep up with interest payments, debt is growing even for many who have left school. Too much debt means too much risk for a generation of young people, many of whom are struggling in today’s economy.

Chopra smartly tackled how rising student debt has ripple effects through the economy. First-time homebuyers inevitably come from the pool of recently graduated. Yet this mass of debt makes them unable to step up to that first home. Indeed, we’re seeing more adult children living at home with no plans to leave, the start of what could be a permanent condition. This reduces new sales and housing starts, with ramifications for the greater economy. Also, in a better economy the mass of borrowing, especially given the increased use of private loans, could crowd out borrowing in other sectors, increasing rates or cutting off access to credit.

This is not a problem along the lines of the housing bubble, measured in terms of sheer size. It is a bigger problem than we realized, however, and CFPB is implicitly faulting the Federal Reserve for using none of their consumer protection abilities while the student debt bubble inflated. In his speech, Chopra mentioned that student loan regulation was previously “spread across a myriad of federal agencies,” and that centralizing them in CFPB will improve matters.

CFPB has worked to increase disclosure of financial aid obligations and repayment options, and they are supervising private student lenders for compliance with federal law, one which includes a complaint system for borrowers. Chopra also reached out for a wide spectrum of responsibility.

But consumer protection is just one piece of preventing a student loan market meltdown. The financial services industry, the higher education community, and policymakers all bear responsibility to address the underlying causes of the growing debt levels.

We all need to understand better and address a number of concerns, such as rapidly rising defaults in the for-profit college sector and high borrowing to gain training in fields with limited opportunities post-graduation. We also need to find methods to get struggling borrowers into alternate payment programs quickly so they can avoid default.

Obviously, the bottom falling out of state funding for higher education, which pushes students on to borrowing indirectly, plays a role here as well.

I’m glad CFPB is paying attention to this after all these years, but it’s sad that it’s taken this long.