Effective Delinquency Rate of Student Loans is More Than 30%

Part II of the 24-page Power Point report put out by New York Fed on Feb. 28, 2013 deals with the delinquency of student loans, here are some facts:

Page 11:

“6.7 million borrowers, or 17%, are 90+ days delinquent. 30-49 year olds have higher delinquency rates.”

Notice that delinquency rate increased between 2004 and 2012 across the age groups.

Page 12:

It turns out, the 17% in the previous page sounds a lot, check this data point:

“About 44% of borrowers are not yet in repayment due to deferments and forbearances.” 

These are people who are not in repayment phase yet.  Balance increase (for 30% of people) because interest keeps on adding up, or not (for 14%).

But What is deferment? And what is forbearance?  I will do some research on these terms just in case you are asking.   

Page 13

The right picture brings it home. For people who are actually repaying their loans, 22% to 35% of the borrowers are 90+ days delinquent, depending of the age group.

Page 15


  • About 17% of borrowers are past due on their student debt more than 90 days in 2012, a large increase from under 10% in 2004
  • 44% of borrowers are not yet in repayment, and excluding those, the effective 90+ delinquency rate rises to more than 30%.
  • The transition rate of borrowers in repayment from current to  delinquent has been rising since 2008 from around 6% to nearly 9%.

So the effective delinquency rate is more than 30%.  Aren’t you worried?

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