How Much Student Loan Debt Are We In?

New Student Loans Increased by Four Percent in 2011

Student loans have been an increasing concern, since surpassed credit card debt and are not at $1 trillion.  Because of the economy, some are going back to school to obtain new skills or attending graduate school, and some students are staying in college longer due to lack of work.  According to Equifax’s National Consumer Credit Trends Report released in March 2012, both federal and private new student loans increased in 2011 by four percent.

Highlights

The breakdown of the borrowers  is as follows:  low risk borrowers with an Equifax risk score of 700 and above comprised 37 percent of new student loans; high-risk borrowers with Equifax risk scores below 620 were almost 35 percent; and those in the middle with Equifax risk scores between 620 and 699 represented 28 percent.

The average total new student loan debt per consumer increased from $9,322 to $9,558 from December 2010 to December 2011, which was a two percent increase.

The average amount per loan was $6,850 in 2010 and $6,333 in 2011, which was an eight percent decrease – the highest in four years.

Largest share of loans were from students 23 years and below. Those with the highest total dollar share of loans were from those 24 to 29 years old, which was due to higher costs of attending graduate school.

Amount of new student debt rose slightly in 2011 for both the” 23 year old and below” and the “24 to 29 years old” age groups  Student debt remained level for the first time since 2008 for the 30 to 39 year old group.

Student loan delinquencies continue to increase. Student loans 90 days or more past due were $7.0 billion in February 2011, an increase of 14.6 percent over a year ago.

“One of the reasons why the unemployment rate has fallen so sharply is that more people are choosing to go back to school, investing in their human capital in the hopes the job market will improve by the time they are finished,” said Amy Crews Cutts, SVP and chief economist for Equifax. “The rising numbers of student loans over the past few years are consistent with this trend while, unfortunately, the rising delinquency rates are consistent with the weak job market many face when they graduate.”

Credit Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Debt, Money & Identity

This post was written by John Ulzheimer