Tuesday, March 06, 2012

Student Loan Debt Delinquency Is Much Worse Than We Thought:

The new info here is that the FRBNY has taken a whack at calculating the true rate of delinquency of student loans, by screening out certain groups that throw off the numbers. Previously, about 14% of borrowers officially had past due loans. Surprise! The number is actually much higher:

We find that 27 percent of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that is delinquent is 21 percent-much higher than the unadjusted rates of 14.4 percent and 10 percent, respectively

So more than one in four borrowers are effectively behind on their student loan payments, and more than one fifth of total student loan debt is effectively delinquent. Fortunately, education is priceless.