Debt & Demographics

Debt & Demographics: The New Burden of Sound Planning

Experian finds total student loan balances increased 149 percent since 2007

Our ongoing analysis of debt as a new, key component of comprehensive financial planning reveals a growing burden for young people just entering the workforce

– The study also shows that the average student loan amount per consumer increased 62 percent during that time, but the percentage of late payments has been decreasing since 2009

COSTA MESA, Calif., Aug. 31, 2017 /PRNewswire/ — Over the last decade, student loan debt in the United States has grown more than $833 billion to reach an all-time high of $1.4 trillion.

Experian®, the leading global information services company, analyzed data from its consumer credit database and found that 13.4 percent of U.S. consumers, spanning from the Silent Generation to Generation Z, have one or more student loans on file. The analysis shows that while student loans constitute the largest amount of non-household debt and the fastest growing debt segment, there is a lower percentage of late payments on these loans.

Fewer Delinquencies

“Student loan balances are on the rise, which is a result of the increasing cost of higher education. Even with this number moving upward, the data is showing a decrease of delinquencies, which means that consumers are managing their loan payments better than they have in the past,” said Michele Raneri, vice president of analytics, Experian.

“A student loan is an investment that can benefit someone for a lifetime,” Raneri continued. “Making more informed decisions is essential for consumers and lenders alike. Lenders need deeper insights into the consumers they are lending to, and consumers — particularly younger borrowers — need a better understanding of how to manage their obligations.”

Key findings from the study include:

  • The average total student loan balance is $34,144.
  • The average VantageScore® for consumers with one or more student loans is 650 — 25 points lower than the national average of 675.
  • Consumers are taking out multiple student loans to fund their education:
  • The average number of student loans is 3.7 per person, up from 2.4 in 2007.
  • The percentage of late payments has dropped 10.1 percent since 2009.

Generational findings include:

  • Generation X has the largest outstanding balance — $39,802.
  • Generation Y has the largest number of loans — 4.4 per person.
  • Generation Z has the highest percentage of loans currently in deferment — 77 percent.

Regional insights

Regionally, the study found that consumers on the East Coast tend to have higher student loan balances. Gainesville, Fla., has the highest average balance at $42,400, while Glendive, Mont., has the lowest at $20,200.

Student loan balances by metropolitan statistical area (MSA)

Highest

Lowest

Metropolitan
statistical area

Balance (in
thousands)

Metropolitan
statistical area

Balance (in
thousands)

Gainesville, Fla.

$42.4

Sioux City, Iowa  

$24.9

Washington, D.C.

$41.4

Laredo, Texas  

$24.5

Charlottesville, Va.

$40.8

North Platte, Neb.  

$22.4

Atlanta, Ga.

$40.4

Harlingen, Texas  

$21.0

San Francisco, Calif.

$39.2

Glendive, Mont.  

$20.2

 

Applied Debt management

“In most cases, higher education is worth the investment because student loans pay off in the form of higher income over time. But it’s especially important for young people to understand the terms of their loans,” said Rod Griffin, director of public education, Experian. “Failure to repay even one of the loans or poor payment behavior could do long-lasting damage to your credit history and scores. Just as the value of your degree is measured over your entire career, how you manage your student loans will impact your financial future.”

An infographic featuring additional data on student lending is available here.

Educational resources
Experian is committed to helping people reach their financial goals. On Tuesdays and Thursdays at 2:30 p.m. Eastern time, Experian’s director of public education Rod Griffin hosts a live Q and A on Periscope, where he answers a variety of questions on topics like ways to avoid financial stress, how to create a budget and savings tips for students.

Other ways to chat with Experian and learn more about credit:

Get helpful credit and personal finance tips (and take a behind-the-scenes look at Experian) daily on Snapchat.
Join #CreditChat, hosted by @Experian_US on Twitter, with financial experts and consumers every Wednesday at 3 p.m. Eastern time.

For answers to common questions, advice and education about consumer credit, visit Experian.

 

About Experian
Experian is the world’s leading global information services company. During life’s big moments — from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers — we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organizations to prevent identity fraud and crime.
We have more than 16,000 people operating across 37 countries and every day we’re investing in new technologies, talented people and innovation to help all our clients maximize every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.
Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.
Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
VantageScore® is a registered trademark of VantageScore Solutions, LLC.