Student Loan Deferment

Student loan balances have jumped. According to a new TransUnion study, balances increased by 75% between 2007 and 2012. Vice President Ezra Becker says the average student loan debt per borrower rose 30% to $23,829.  “It is not unexpected that student debt would increase, we had a lot of consumers who went back to school as a result of frustration with the job market.” The student debt burden has grown significantly in the past five years, adds Becker. “Between 2007 and 2012, the overall student debt burden in this country went from about $511 billion to $893 billion.” The study also finds that more than half of student loans are in deferred status, where the repayment of the principal and interest of the loan is temporarily delayed. Becker talks about the long-term risk of the increasing debt burden.  “When you have consumers who have a higher debt burden for student loans and therefore more of their disposable income is going to go to service those loans, they have less available to do other things, such as buy a car or pay rent or buy clothes that are suitable for the work force.” Deferred student debt also rose sharply, concludes Becker. “It terms of deferred student debt it went from about $288 billion to $388 billion and that sits at about 43% of all student debt that is out there.” The study noted that deferments might be an issue, because more than half of college graduates under the age of 25 are either unemployed or underemployed.