Student Loan Debt is rising... And so are the default rates.

1. Student Loan Debt
It’s Getting Ugly!

2. • From the second to the third quarter of
2011, the total outstanding student loan
balance grew 2.1 percent, from $852
billion to $870 billion.
• Of the 241 million people in the United
States who have a credit report with
Equifax, our data provider, about 15.4
percent—or 37 million—hold
outstanding student loan debt.
• Among people under thirty years old,
40.1 percent have outstanding student
loan debt.
• Among people between the ages of thirty
and thirty-nine, 25.1 percent have
outstanding student loan debt.
• As a result, $580 billion of the total $870
billion in student loan debt is owed by
people younger than forty (see charts
below).
People under 40 make up 66.6% of total
student loan debt

3. • The average outstanding student
loan balance per borrower is
$23,300.
• About one-quarter of borrowers
owe more than $28,000; about 10
percent of borrowers owe more
than $54,000.
• Borrowers between the ages of
thirty and thirty-nine have the
highest average outstanding
student loan balance, at $28,500,
Average outstanding loan
debt per student is $23,300

4. • How much difficulty are borrowers
having paying back their debts?
• Of the 37 million borrowers who have
outstanding student loan balances as of
third-quarter 2011, 14.4 percent, or
about 5.4 million borrowers, have at
least one past due student loan
account.
• Together, these past due balances sum
to $85 billion, or roughly 10 percent of
the total outstanding student loan
balance.
• To put this in perspective, the same 10
percent rate applies on average to
other types of household delinquent
debt, including mortgages, credit
cards, and auto loans.
5.4 Million or 25% of borrowers are
past due (excludes deferments)

5. • some special accounting used for student loans, not applicable to
other types of consumer debt, makes it likely that the delinquency
rates for student loans are understated.
• In the case of federally backed loans, which represent a majority of
total lending, repayment is deferred until the student graduates from
school and can then be pushed back by another six-month grace
period.
• How do these student loans in deferment or grace periods show up on
credit reports and contribute to the delinquency statistics?
• Given that no payment is necessary until graduation, these deferred
student loans are not included in the past due balance but they are
included in the total balance from which the delinquency rate is
derived.
Delinquency rates are
understated

6. • In sum, student loan debt is not just a concern for the young.
• Parents and the federal government shoulder a substantial part
of the postsecondary education bill.
• Moreover, the student loan delinquency picture is not fully
captured in the broad statistics since a significant proportion of
borrowers and balances are not yet in the repayment cycle.
• The implications of this last fact for future changes in the
student loan delinquency rate are a very important area of
research.
The burden is broadly
spread…we all bear a cost
directly, or indirectly.

7. • Student loan debt is the only form of consumer debt that
has grown since the peak of consumer debt in 2008.
• Balances of student loans have eclipsed both auto loans
and credit cards, making student loan debt the largest
form of consumer debt outside of mortgages.
Student Loan Debt History