Private student loans continue to show positive trends in repayment, charge-offs, delinquencies, and other areas, according to the latest MeasureOne Private Student Loan Report.
The semi-annual report is based on data collected from MeasureOne’s Data Consortium, a group of the six largest private student loan lenders and holders, including:
For the entire private student loans market, MeasureOne estimates the outstanding balance to be $91 billion, 7.2 percent of the $1.27 trillion in outstanding balances for the entire student loan market. The consortium represents about 71 percent of the entire private student loans market and the majority of new private loans. At the end of the first quarter of 2015 (Q1 2015), loans to undergraduate students comprised 85.29 percent ($50.6 billion) of the total outstanding balance and graduate loans comprised 14.71 percent ($8.7 billion).
Overall, the repayment balance as a percentage of the total outstanding balance has remained consistent at near 75 percent over the past two years. The data shows just over $49 billion – about 75.7 percent of overall balances – in total balances in repayment Q1 2015, a 53 percent increase since Q1 2010. In addition, there was a 23 percent increase in the current balance of private students loans, representing a rate of about $2 billion per year on average. According to MeasureOne, this data indicates that while the total balance is increase, the share of those loans in repayment is increasing at a faster rate.
Regarding delinquency, the data shows a 55 percent decrease in early-stage delinquency and a 57 percent decrease in late-stage delinquency from Q1 2010 to Q1 2015. Seventy-six percent of all private loans today are in repayment status, a 24 percent increase from Q1 2010 when only 61 percent were in repayment.
As a percent of repayment, charge-offs in Q1 2015 were at 52 percent lower than the same quarter in 2010 at 2.7 percent, which is the lowest Q1 charge-offs figure since before the financial crisis. Forbearance also saw a significant drop between 2009 and 2013 and is currently at 2.2 percent, or $1.4 billion, 37 percent lower than Q1 2010. About 20 percent of overall balances -- $13 billion -- in Q1 2015 were in deferment and 2 percent of overall balances -- $1.3 billion – were in a grace period.
When measured on a year-over-year basis, downward trends for delinquency rates as a percentage of repayment continue, with a 12.7 percent decline in 30 to 89 day delinquencies from Q1 2014 (2.99 percent) and Q1 2015 (2.61 percent). For delinquencies 90 days or more, there was a 13.4 percent decline from Q1 2014 (2.54 percent) to Q1 2015 (2.2 percent).
Publication Date: 6/19/2015