Student Loans: Half are 'Deferred' as Average Debt Up to $23,829

Student Loans: Half are 'Deferred' as Average Debt Up to $23,829More than half of student loan accounts are in deferred status, where the borrower can temporarily delay repayment of the principal and interest, according to a study by TransUnion.
Deferred loans now represent 43.5 percent of all student loan balances.
TransUnion, one of the nation’s three primary credit-reporting agencies, also also found that reported student loan balances increased by 75 percent between 2007 and 2012, with the average student loan debt per borrower increasing 30 percent to $23,829.
But it’s the high number of student loans in “deferment” status that is most troubling.
Payments for certain student loans are automatically deferred while the borrower is still in school. Borrowers can also apply for deferment based on financial hardship. But the  deferment period often comes to an end after three years.
The TransUnion study noted that deferments may be an issue, because more than half of college graduates under the age of 25 are either unemployed or underemployed — the highest rate in 11 years, according to an analysis of government data.
“With the economy either in recession or slowly coming out of it during the study period, we had expected that student loan balances might increase as consumers frustrated with the job market went back to school to work toward a different career path,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. “However, the rate of growth we observed was truly eye opening.”
Between 2007 and 2012, balances of reported deferred loans jumped from $228 billion to $388 billion. In that same period, average student loan balances per borrower overall increased from $18,379 to $23,829.
Student Loans: Half are 'Deferred' as Average Debt Up to $23,829

One thought on “Student Loans: Half are 'Deferred' as Average Debt Up to $23,829

  • January 31, 2013 at 9:14 am
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    Student debt is stunting the growth of the economy. Student loans have increased by 500% over past decade. As the next generation graduates from college, they are plagued by insurmountable debt that places demands on their income, limiting their ability to spend their earnings in ways that stimulate the economy.
    http://www.youtube.com/watch?v=mRA9ndc1pCM

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