Student Loan Delinquencies on the Rise

In more troubling news for student loan borrowers, the Federal Reserve Bank of New York reported today that student loan delinquencies were up in the final months of 2014. 

“Although we’ve seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student-loan balances and delinquencies is concerning,” Donghoon Lee, research officer at the New York Fed, said in an e-mailed statement. “Student-loan delinquencies and repayment problems appear to be reducing borrowers’ ability to form their own households.

The nation's student-loan balance also continues to balloon -- up $31 billion last quarter to $1.16 trillion. And that's not all. 

Delinquency rates for student loans probably understate the actual situation, according to today’s report. About half of the student loans are in deferment, in grace periods or in forbearance, temporarily removing them from the repayment cycle.

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