Student Loan Delinquencies Climb
The delinquency rate on student loans originated from 2005 to 2007 is 12.4%, while the delinquency rate on student loans originated from 2010 to 2012 is 15.1%, FICO said.
The research, which FICO said was based on an examination of 10 million consumer credit files in 2012, also revealed the average amount of U.S. student loan debt increased by 58% from 2005 to 2012–$17,233 to $27,253–while average U.S. credit card and auto loan debt amounts declined.
Additionally, in a quarterly survey conducted by FICO in December 2012, nearly 60% of responding bank risk managers said they expected student loan delinquencies to increase over the next six months and delinquencies on all other types of consumer loans to decrease over the next six months.
“This situation is simply unsustainable and we’re already suffering the consequences,” said Andrew Jennings, chief analytics officer for FICO and head of FICO Labs.