Equifax Reports Student Loan 'Severe Derogatory' Balances Increase 36% Year
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
"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
oBalances outstanding on student loans increased more than 14%, from $746.3
billion to $852.7 billion.
oThe number of student loans outstanding increased nearly 13%, from 108
million to more than 123 million.
Crews Cutts continued, "Student loans are unique today in that they are the
only major form of credit that is not rigorously underwritten on either a past
credit-performance basis (such as using credit scores) or ability to pay based
Other highlights from the most recent data include:
oThe 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.
oAuto loan balances in February 2013 total $789 billion, a 50-month high.
oAt more than $377 billion, total balances on bank-sourced auto loans are
at a five-year high.
oSimilarly, total balances on loans funded by auto finance companies stand
at more than $412 billion through February 2013, a 48-month high.
oSeverely delinquent balances on home equity lines of credit declined 28%
from February 2012 to February 2013, from $14 billion to less than $10
oSeverely delinquent balances on closed-end home equity loans declined 25%
from February 2012 to February 2013, from $6.6 billion to $5 billion.
oIn that same time, severely delinquent balances on first mortgages
declined 23%, from $490 billion to $375 billion.
oOf note, 65% of total severely delinquent balances on first mortgages are
tied to loans opened from 2005-2007.
oSimilarly, 73% of delinquent balances on home equity lines of credit were
opened in that same time period.
About Equifax, Inc.
Equifax is a global leader in consumer, commercial and workforce information
solutions that provide businesses of all sizes and consumers with insight and
information they can trust. Equifax organizes and assimilates data on more
than 500 million consumers and 81 million businesses worldwide, and uses
advanced analytics and proprietary technology to create and deliver customized
insights that enrich both the performance of businesses and the lives of
Headquartered in Atlanta, Equifax operates or has investments in 18 countries
and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is
traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more
information, please visit www.equifax.com.
CONTACT: Demitra Wilson
Equifax Inc. logo
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