We’ve all heard about the fact that some colleges encourage students to go into debt for degrees that fail to equip students to repay the debt. That includes ballooning the default which taxpayers ultimately repay. But, you can be sure the lenders themselves find such lending highly profitable. That’s not surprising because the default charges include a 25% penalty when the lender first declares the loan in default. In fact, this is very much like a credit card over the limit fees.
Amazingly, the 2020 student loan debt is now a staggering $1.56 trillion. In the list below, the statistics show the number of student loans that are in default. As you can see, if you are in default with your student loan, you are not alone. Remember, it’s better to start sooner than later when it comes to bankruptcy. So, continue to do your research and please, use the resources on this site. But, don’t procrastinate when you need to take action. Instead, pick up the phone and call me today at 502-625-0905.
Student Loan Statistics
- Total Student Loan Debt: $1.56 trillion
- Student Loan Delinquency Or Default Rate: 10.8% (90+ days delinquent)
- Direct Loans – Cumulative In Default: $119.8 billion (5.5 million borrowers)
- Direct Loan In Forbearance: $122.9 billion (2.8 million borrowers)
- Total U.S. Borrowers With Student Loan Debt: 44.7 million
- Average Student Loan Debt: $32,731
- Average Student Loan Payment: $393
- Median Student Loan Debt: $17,000
- Median Student Loan Payment: $222
Source: As of 3Q 2019, Federal Reserve & New York Federal Reserve
Taken from the Department of Education
National Student Loan Cohort Default Rate Trends
DOE Press Release, September 26, 2018
From FY 2014 to FY 2015, cohort default rates fell for public and private institutions, while rising slightly among borrowers who attended proprietary schools.
For public institutions, the FY 2015 rate, 10.3 percent, fell from 11.3 percent in FY 2014. Public institutions make up approximately 27 percent—or 1,660—of the total number of schools and represent approximately 53 percent of borrowers who entered repayment that year. The rate dropped among private schools from 7.4 percent in FY 2014 to 7.1 percent in FY 2015. Private schools comprise approximately 28 percent—or 1,726—of the total number of schools.
Among the 2,364 proprietary institutions in the borrower cohort, the default rate went from 15.5 percent for FY 2014 to 15.6 percent for FY 2015. Proprietary schools accounted for approximately 38 percent of the total number of schools. Additionally, 405 foreign schools saw their rate remain at 3.5 percent for FY 2014 and FY 2015. Foreign institutions make up nearly 7 percent of all postsecondary schools.
Borrowers needing assistance in repaying their student loans can visit www.federalstudentaid.ed.gov or contact the holders of their loans to learn about repayment options. For help locating their loan holders, borrowers may access nslds.ed.gov/nslds/ or contact the Department’s Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
Do you need help managing your student loan? Contact my office right away to start the conversation. Nick C. Thompson, Attorney: 502-625-0905