According to a new federal report, more than 1 in 4 borrowers are likely delinquent in repaying their student loans, a number much higher than the 14.6% delinquency rate suggested by previous calculations.
The Federal Reserve Bank of New York calculated delinquency rate of 14.6% by comparing the total number of people with student loans (about 37 million) to the number of people with at least one past-due student loan account (about 5.4 million).
But the Los Angeles Times reports that this undercounts the actual rate of student loan delinquency. The calculation used by the Federal Reserve fails to consider that federally guaranteed loans don’t have to be repaid until six months after a student graduates. According to the Times report, adding borrowers with outstanding federally guaranteed loans, the rate of past-due student loan balances jumps to 27%.
Not only is the amount of delinquent student loan borrowers soaring, the amount owed is also astronomical. According to the Federal Reserve, Americans owe about $870 billion in outstanding student loans – more than what Americans owe for credit card debt ($693 billion) and car loans $730 billion). On average, student loan balance stands at $23,300 per borrower. But there are about 167,000 student loans borrowers – about 0.5% of the total – who owe more than $200,000.
If you have student loans that are to burdensome to manage other debt, contact The Law Office of Zachary Bushatz, LLC at 937-331-8061 to see how I can help you with debt relief or visit my website www.bushatzlaw.com
- College grads getting schooled on student loans (q13fox.com)
- 13 States Where Student Loan Debt Is Crushing College Grads (huffingtonpost.com)