PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Student Loans: A Trillion Dollar Black Hole or Perhaps Credit Card Debt Is Not So Bad

By Brian Riley
July 10, 2018
in Analysts Coverage
0
7
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
The Ugly Side of Lending: Online Installment Loans

The Ugly Side of Lending: Online Installment Loans

Rising student loans are a well-intended left over from the Obama administration.  It is still hard to believe that student loan debt dwarfs US credit card debt.  In the Federal Reserve’s last report, credit card debt was $1.0 trillion, versus student loans at $1.5 trillion.  In 2013, credit cards were at $855 billion, and student loans were 1.1 trillion, which illustrates the rapid growth in the student market.

Today’s read comes from the CFPB and The National Law Review where the latter cites a recent report on repayment patterns for student loans.

  • The CFPB’s analysis focuses on borrowers when they first pay off individual student loans.  The report uses data from the Bureau’s Consumer Credit Panel, a nationally-representative sample of approximately five million de-identified credit records maintained by one of the three nationwide credit reporting companies.

Now, I’ve worked in credit for literally 40 years and try to avoid credit like the plague.  I am one of the few people in Florida to have 14 months left on a 25-year mortgage.  I have a handful of credit cards that I use to reap points and pay them off quickly, usually in the first billing cycle.  Moreover, I have three adult kids who owe no student loans.  Call me crazy, but I am risk manager by trade.

  • Most borrowers paying off a student loan do so before the scheduled due date of the final payment, often with a single large final payment.  The median final payment made on a student loan is 55 times larger than the scheduled payment (implying a payoff at least 55 months ahead of schedule), with 94 percent of final payments exceeding the scheduled payment and only 6 percent of loans paid off with the final few payments equal to the scheduled payments.

This report is interesting but very light on the delinquency rates found in student loan.  The NYFed pegs the delinquency rate for student loans in the 10% range more than twice that of credit cards.  While it is interesting to see how doctors, lawyers, and Indian chiefs pay off their debt, it is the non-payers that make the student loan debacle so messy, not to mention the average student that might carry the burden for 20 years.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

7
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Debt

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    supply chain payments

    The Payment Process: The Supply Chain’s Most Overlooked Cyber Risk

    July 17, 2025
    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    July 16, 2025
    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    July 15, 2025
    Embedded Finance

    Embedded Finance: Bringing Payments Under a Single Umbrella

    July 14, 2025
    Making Real-Time Payments a Reality

    Fulfilling the Promise: Making Real-Time Payments a Reality

    July 10, 2025
    mortgage

    The Rich Benefits of In-House Payment Systems

    July 9, 2025
    digital cards

    Beyond Plastic: Why Digital Cards Are the Future

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result