The Federal Reserve Bank of New York released figures today
that showed as many as 1 in 4 borrowers are carrying a
PAST-DUE student loan balance in the third quarter.
That is a much higher delinquency rate than anticipated -
5.4 million of the 37 million borrowers with student loan
balances had at least one past-due student loan account - -
14.6% rate.
Many educators are concerned about the increasing financial
squeeze on college students, their families and the
repercussions for the nation's economy.
The New York Fed report concluded that student loan debt is
not just a concern for the young. Parents and the federal
government shoulder a substantial part of the post
secondary education bill.
The debt levels are distorting what fields people are
taking on.
The New York Fed said that the past-due balances on student
loans amounted to $85 billion or about 10% of the total
owed. The same 10% rate applies on average to other types
of consumer delinquent debt, such as mortgages and credit
cards.
Fed researchers said delinquency figures for student loans
understate the magnitude of the problem because calculations
do not take into account that federally guaranteed loans,
which make up the bulk of student debt, typically don't
require repayment while borrowers are still in school and
for six months after graduation.
Sheila McKinney
