According to the more recent TransUnion study,
more than half of student loans are in deferred status where the loan
payment has been temporarily delayed. Deferred loans now represent 43.5%
of all student loan balances.
The study also showed that the balances on these deferred loans have
grown from $228 billion in 2007 to $388 billion in 2012, an increase of
70%. The average student loan debt per borrower grew 30% to $23,829
during those years.
“With the economy either in recession or slowly coming
out of it during the study period, we had expected that student loan
balances might increase as consumers frustrated with the job market went
back to school to work toward a different career path,” said Ezra
Becker, vice president of research and consulting in TransUnion’s
financial services unit. “However, the rate of growth we observed was
truly eye opening.”
One cause for the deferments may be that more than half of the
college graduates under the age of 25 are unemployed or underemployed,
according to the study’s analysis of government data.
The study also shows the disparity between federally backed student
loans–those guaranteed by the government–and private student loans.
Between 2007 and 2012, federal loan balances jumped 97% while private
loan balances only rose 4%. During that time, federal student loan
delinquencies rose 27%, while private loan delinquency rates actually
dropped 2%. The delinquency rate for federal loans was 12.31% as of
March 2012 while it was only 5.33% for private loans.
“While the focus in recent years has been on the mortgage market,
lenders will need to keep an eye on student loan portfolios–and on
customers who have student loan debt–as the high delinquency rates among
these borrowers can spell trouble across multiple products,” said
Earlier this week, a FICO study revealed that student loan debt has
increased dramatically and the default rates on these loans are now much
higher than previous years. The study found that nearly 12 million
consumers had two or more open loans on their credit report in 2005.
That figure has more than doubled to 26 million in 2012. In 2005,
consumers with open student loans on file had an average student loan
debt of $17,233. In 2012, that debt had increased 58% to $27,253. The
percentage of consumers with student loan debt in excess of $100,000
quadrupled between 2005 and 2012 from 0.2% to 0.8%. Approximately 1.2
million more consumers had student loan debt in excess of $100,000.