Friday, February 1, 2013

Unsustainable... A Drag

In the category of Tell Us Somethin' We Don't Know:
Student Loan Debt: New Reports Find 'Unsustainable' Trend Dragging Economy
Two new reports released this week show Americans are increasingly struggling to repay student loan debt, creating a drag on the economy and wasting taxpayer money if borrowers default on their loans.

An analysis released on Tuesday of 10 million credit files from Fair Isaac Corp. (FICO) found the average student debt load ballooned 58 percent from 2005 to 2012 -- from $17,233 to $27,253. In the same period, the number of consumers with two or more open student loans on their credit report grew from 12 million in 2005 to 26 million in 2012, according to the Wall Street Journal.

The FICO estimate is higher than the Project on Student Debt's most recent annual report, which estimated the class of 2011's average debt at $26,600.

Of student loans issued between 2005 and 2007, an industry boom period, 12.4 percent are 90 days past due, according to FICO. Forbes reports 15.1 percent of loans issued between 2010 and 2012 are 90 days past due.

Dr. Andrew Jennings, FICO’s chief analytics officer and head of FICO Labs, said in a release the situation is "simply unsustainable."

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