ATLANTA, March 25, 2013 (GLOBE NEWSWIRE) -- According to Equifax's (NYSE:EFX) latest National Consumer Credit Trends Report, severe derogatory or charged-off balances, the bulk of student loan write-offs, for the first two months of the year hit $3 billion, an increase of more than 36% from same time a year ago ($1.9 billion) while balances in bankruptcy remained level at $0.5 billion.
"Driven heavily by economic factors, including unemployed or under-employed consumers going back to school along with the rising cost of tuition, student lending has demonstrated consistent, year-over-year growth," said Equifax Chief Economist Amy Crews Cutts. "Continued weakness in labor markets is limiting work options once people graduate or quit their programs, leading to a steady rise in delinquencies and loan write-offs. Many policy options are being discussed regarding how to reduce some of the burden, including graduated payments that reflect the lower starting salaries of new graduates, and improve the performance of these loans."
Other changes in student loan characteristics from February 2012 to February 2013:
- Balances outstanding on student loans increased more than 14%, from $746.3 billion to $852.7 billion.
- The number of student loans outstanding increased nearly 13%, from 108 million to more than 123 million.
- The most recent data shows that the total number of outstanding auto loans in February 2013 is at its highest level in 45 months, summing to more than 59 million.
- Auto loan balances in February 2013 total $789 billion, a 50-month high.
- At more than $377 billion, total balances on bank-sourced auto loans are at a five-year high.
- Similarly, total balances on loans funded by auto finance companies stand at more than $412 billion through February 2013, a 48-month high.
- Severely delinquent balances on home equity lines of credit declined 28% from February 2012 to February 2013, from $14 billion to less than $10 billion.
- Severely delinquent balances on closed-end home equity loans declined 25% from February 2012 to February 2013, from $6.6 billion to $5 billion.
- In that same time, severely delinquent balances on first mortgages declined 23%, from $490 billion to $375 billion.
- Of note, 65% of total severely delinquent balances on first mortgages are tied to loans opened from 2005-2007.
- Similarly, 73% of delinquent balances on home equity lines of credit were opened in that same time period.