Equifax Reports New Credit for Student Loans in Q1 2013 Increases More Than 20% Year-Over-Year
ATLANTA, June 26, 2013 (GLOBE NEWSWIRE) -- According to Equifax's (NYSE:EFX) latest National Consumer Credit Trends Report, new credit for student loans posted in Q1 2013 posted at $15.6 billion, an increase of over 20% for the same time a year ago ($12.9 billion). The total number of new student loans originated increased just 3.9% in that same time, from 2.7 million to 2.8 million.
The most recent data also shows that from year-over-year March 2012-2013:
- The average size of a student loan increased more than 11%, from $5,618 in March 2012 to $6,242 in March 2013.
- Among consumers who took out at least one student loan during March 2013, the average total amount borrowed across all loans increased nearly 6% from March 2012, from $8,636 to $9,132.
"The total number of student loans outstanding has doubled since 2008 and balances owed have nearly doubled. This trend was primarily driven by large increases in college enrollments and middle-aged adults going back to school due to the scarcity of available positions," said Equifax Chief Economist Amy Crews Cutts. "But students who do borrow to fund college expenses are also increasing the amount they end up owing in large part due to deferrals of interest payments when they leave college without a job or one that doesn't pay well enough and they end up in an income-based repayment plan that doesn't cover the total monthly interest owed.
For example, over the first five months of 2013, borrowers who took out student loans in 2008 increased the amount they owed on those loans by $719 million (1.0%), while 2009 and 2010 borrowers added $2.8 (3.1%) and $3.1 billion (2.2%), respectively."
"While conversation has recently focused on the doubling of the interest rates for federally subsidized Stafford loans on July 1, the change must be kept in perspective. It will not have an impact on loans originated prior to the change, and an incoming freshman student borrowing the maximum amount under the federally-subsidized loan program over the next five years ($24,500) would see an increase in monthly payments of approximately $40 per month when repayment obligations begin after graduation, " said Cutts.
Other highlights from the most recent data include:
- The total balance of student loans outstanding increased more than 16% from May 2012 to May 2013, from $755 billion to more than $879.1 billion.
- The total balance of student loan write-offs (including severe derogatory and bankruptcy) year-to-date in May 2013 is $9.3 billion, an increase of 60.3% from same time a year ago ($5.8 billion).
- From May 2012-2013, the total number of student loans increased nearly 10% from more than 115 million to more than 126 million.
About Equifax, Inc.
Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 500 million consumers and 81 million businesses worldwide, and uses advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.
CONTACT: Demitra Wilson
(404) 885-8907
Demitra.Wilson@equifax.com
Released June 26, 2013