ATLANTA, June 26, 2013 (GLOBE NEWSWIRE) -- According to Equifax's (NYSE:EFX) latest National Consumer Credit Trends Report, new credit for student loans posted in Q1 2013 posted at $15.6 billion, an increase of over 20% for the same time a year ago ($12.9 billion). The total number of new student loans originated increased just 3.9% in that same time, from 2.7 million to 2.8 million.
The most recent data also shows that from year-over-year March 2012-2013:
- The average size of a student loan increased more than 11%, from $5,618 in March 2012 to $6,242 in March 2013.
- Among consumers who took out at least one student loan during March 2013, the average total amount borrowed across all loans increased nearly 6% from March 2012, from $8,636 to $9,132.
"The total number of student loans outstanding has doubled since 2008 and balances owed have nearly doubled. This trend was primarily driven by large increases in college enrollments and middle-aged adults going back to school due to the scarcity of available positions," said Equifax Chief Economist Amy Crews Cutts. "But students who do borrow to fund college expenses are also increasing the amount they end up owing in large part due to deferrals of interest payments when they leave college without a job or one that doesn't pay well enough and they end up in an income-based repayment plan that doesn't cover the total monthly interest owed.For example, over the first five months of 2013, borrowers who took out student loans in 2008 increased the amount they owed on those loans by $719 million (1.0%), while 2009 and 2010 borrowers added $2.8 (3.1%) and $3.1 billion (2.2%), respectively." "While conversation has recently focused on the doubling of the interest rates for federally subsidized Stafford loans on July 1, the change must be kept in perspective. It will not have an impact on loans originated prior to the change, and an incoming freshman student borrowing the maximum amount under the federally-subsidized loan program over the next five years ($24,500) would see an increase in monthly payments of approximately $40 per month when repayment obligations begin after graduation, " said Cutts.