More evidence hurricanes created (temporary) hardships for student loans
The share of private student loans in hardship went up in the third quarter as natural disasters in the southern United States prompted borrowers to request forbearance, according to MeasureOne.
At the end of September, the share of loans in MeasureOne’s database in forbearance was 2.88% of the outstanding balance, up 26.81% on the year.
“This increase in forbearance is viewed as temporary in nature and non-recurring,” the company stated in a report published Tuesday.
That was in line with third-quarter results for securitized private student loans reported last month by DBRS.
MeasureOne’s database represents a broader pool of borrowers. Contributors include the six largest student loan lenders and holders – Citizens Bank, N.A., Discover Bank, Navient, PNC Bank, Sallie Mae Bank and Wells Fargo Bank. The third-quarter report includes nine other data contributors: College Ave Student Loans and eight members from the Education Finance Council. In total, these 15 data contributors represent 62.54% of the private student loans outstanding in the U.S.
The share of loans in deferment also grew in the third quarter, but by a much smaller amount, 0.41%, to 18.27%. The share of loans in repayment declined by 1.22% on the year to 73.57%; and loans in a grace period between graduation and repayment increased 4.48% on the year to 5.28%.
The total outstanding balance for private student loans, which borrowers use to fill a gap between federally guaranteed loans, grants, scholarships and the total cost of attending college, dipped in the third quarter, by 0.45% to $64.23 billion. Undergraduate loans account for 86.99% of outstanding balance and graduate loans make up the balance 13.01%.
As a result, the share of undergraduate loans in total outstanding balance grew 0.72% on the year and that of graduate loans contracted 4.58%.