Benchmark your student loans against others

How Does Your Student Loan Debt Stack Up?

by Gary Foreman

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Do you have student loan debt? You're not alone. Over four in ten 25-year-olds owe money for their education. At the end of 2012, there was close to $1 trillion in student loans outstanding. That's more than we owe on credit cards or auto loans. In fact, student loans are the only type of consumer debt that increased during the recent recession.

Whether you're 25 or 55, if you have student loans, a paper published by the Federal Reserve Bank of New York will be interesting reading. The paper reveals some fascinating statistics about student loans and the people who have them.

So how does your student loan stack up?

If you took out your first student loan in the last nine years, you have plenty of company. The number of borrowers has increased by 70% since 2004.

And, the amount they owed tripled in that time. The average balance per borrower went up by 70% since 2004. It's now approaching $25,000.

But, don't congratulate yourself if your outstanding balance is less than the average. The average is skewed higher by the few who have large student loan debt. Fully 40% of student loan borrowers have balances of less than $10,000 and another 30% owe between $10,000 and $25,000, so seven in ten borrowers owe less than $25,000.

Still, if you owe more than $25,000 you're not alone. Fully 18% have a balance between $25,000 and $50,000. Another 9% owe between $50,000 and $100,000, and at the top of the debt pyramid, the remaining 4% will need to repay more than $100,000.

Have you started to repay your loans? Many haven't yet. About 44% of borrowers are not yet in repayment due to deferments and forbearances.

If you are repaying, are your payments on time? If so, you're part of the 39% who are current. Those who are on time are part of a shrinking group. In 2004, less than 10% of all borrowers were 90+ days delinquent. By 2012, that number had grown to 17%.

If we eliminate those in deferment or forbearance and only count those who are repaying, fully 30% are 90+ days behind in their payments. That's up from 20% in 2004.

Apparently 30 to 49 year olds have the hardest time keeping up with their loan payments. Fully 20% are 90+ days delinquent. In the under 30 set, the delinquent rate drops to 16%. For those over age 50, it's 14%.

If you're 90+ days delinquent on your student debt, you also are more likely to be behind in your auto loan (17%) and credit card debt (35%).

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You're probably also finding it almost impossible to get a mortgage. For those aged 25 to 30 who also were 90+ days delinquent on their student loans, less than half of 1% was able to get a new mortgage last year.

Even those who were current weren't getting many mortgages. Only 4% of 25 to 30 year olds were taking out new mortgages. That was down from 9% in 2005.

Clearly statistics can't tell the whole student debt story. But, they can help answer the question about how your student loans stack up to others.

Gary Foreman

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, and Gary shares his philosophy of money here. You can follow Gary on Twitter. Gary is also available for audio, video or print interviews. For more info see his media page.

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