Private Student Loan Delinquencies Fall to Lowest Level since Pre-2008 Crisis

Student Lending
June 10, 2015

 

Washington, D.C. – Richard Hunt, President and CEO of the Consumer Bankers Association (CBA), issued the following statement after MeasureOne released “The Private Student Loan Report – Q1 2015.”  The report is an update to previously released comprehensive studies of the private student loan market and reveals continued positive performance trends. 

“Today’s MeasureOne report once again shows banks are working in a responsible manner with students.  The private student loan market, though small, continues to operate in a thoughtful way as demonstrated by the extremely high repayment rate and low delinquency rate.  Our CBA member banks continue to be proud of their partnership with students as they pursue higher education,” said CBA’s President and CEO Richard Hunt.

The MeasureOne report highlights the following:

  • Year-over-year delinquencies continued to exhibit a significant downward trend.
  • Overall, delinquency rates are the lowest since before the 2008 economic crisis. Delinquencies have dropped while lenders continue to use forbearance judiciously, with only 2.2% of loans in forbearance as of Q1 2015. Early and late stage delinquency rates averaged 3.0% and 2.3%, respectively, for latest four quarters and both show year-over-year decline of approximately 13%.
  • Charge-off rates are low at 2.7% for Q1 2015, the year-over-year charge-off decline is 14.5%.
  • Loan performance continues to improve with each subsequent origination vintage. Delinquencies and charge-offs have generally declined for each successive vintage in each quarter after origination.
  • As of Q1 2015, total balances of the six Consortium Participants edged up 2.1% year-over-year to $65.0 billion, reflecting modest growth in originations for undergraduate loans for 4-year programs.
  • The percentage of loans in different repayment statuses has remained stable since 2011, with about 75% of loans in active repayment at any given time.
  • Private student lending makes up just 7.2 percent of all loans in repayment, or $91.0 billion. 
  • Federal lending programs represent 92.8 percent of the market, or $1.17 trillion in outstanding student debt.

About CBA
The Consumer Bankers Association (CBA) is the trade association for today's leaders in retail banking - banking services geared toward consumers and small businesses. The nation's largest financial institutions, as well as many regional banks, are CBA corporate members, collectively holding two-thirds of the industry's total assets. CBA’s mission is to preserve and promote the retail banking industry as it strives to fulfill the financial needs of the American consumer and small business.

The Consumer Bankers Association is the recognized voice on retail banking issues in the nation’s capital. Founded in 1919, CBA provides leadership, education, research and federal representation on retail banking issues. For more information, please contact Maggie Seidel, mseidel@consumerbankers.com, (571) 447-0197 or visit www.consumerbankers.com.

Premier Sponsors