“A new study on student loans offers more evidence of the financial squeeze facing recent college graduates. But nearly as striking is the company behind the study. TransUnion, one of the nation’s largest consumer credit rating agencies, is among a growing number of organizations in the lending community looking closely at whether the growth in student debt is affecting the overall creditworthiness of a whole generation of borrowers.
“Thisis an emerging area of research,” said TransUnion Vice President of Research and Consulting Ezra Becker in an interview.
While the new study does not draw any conclusions about the borrowers’ creditworthiness, it does paint a grim picture of the college debt situation.
(Read More: Student-Loan Delinquencies Now Surpass Credit Cards)
TransUnion says it looked at all 300 million consumers in its database over the past five years, and found that as of last March 37.5 million had at least one student loan. That is up 35 percent from 2007, when 27.8 million consumers had student loans. The average student loan debt per borrower jumped to $23,829 in 2012 from $18,379 in 2007. That is a 30 percent increase. Reported student loan balances jumped 75 percent in the same period—”unprecedented growth,” according to Becker.
The study also found more than half of student loans are in “deferment,” where the borrower can temporarily delay making payments. Payments for certain types of student loans are automatically deferred while the borrower is still in school, but borrowers can also apply for deferment based on financial hardship. The difficulty comes when the deferment period—often three years—is up, and the borrower comes face to face with a dismal job market….”
If you enjoy the content at iBankCoin, please follow us on Twitter
