The Early-stage Delinquency rate (30-89 days past due) remains stable at a low 2.59% of loans in repayment. At end-Q3 2017, it is 38.17% lower compared to five years ago. Both undergraduate and graduate early-stage delinquency rates are at, or near, the lowest reported levels for a Q3. For undergraduate loans, it is 2.73% at end-Q3 2017, 68.47% lower than the peak rate of 8.65% at end-Q4 2008. For graduate loans, it is 1.73% at end-Q3 2017, about 56.42% lower than the peak rate of 3.97% at end-Q4 2009.
The Late-stage Delinquency rate (90 days or more past due) has also stabilized down to a low 1.59% of loans in repayment. At end-Q3 2017, it is 60.45% lower compared to five years ago. Both undergraduate and graduate late-stage delinquencies are at, or near, the lowest reported levels for a Q3. For undergraduate loans, it is 1.69% at end-Q3 2017, 76.79% lower than the peak rate of 7.28% at end-Q2 2009. For graduate loans, it is 1.04% at end-Q3 2017, 61.86% lower than the peak rate of 2.71% at end-Q1 2010.
Annualized Gross Charge-off rate increased by 5.33% YoY to 2.04% of loans in repayment at the end of Q3 2017. This is the first YoY growth in charge-offs after seven consecutive quarters of YoY decline. The Charge-off rate is 49.08% lower compared to five years ago when end-Q3 2012’s charge-off rate was at 4.02%.
The share of loans in Forbearance increased 26.81% YoY to 2.88% of total outstanding balance; loans in Deferment increased 0.41% YoY to 18.27%; loans in Repayment decreased by 1.22% YoY to 73.57%; loans in Grace increased 4.48% YoY to 5.28%.
The Total Outstanding Loans balance for private student loan participants of this report contracted 0.45% YoY to $64.23 B. Of this, undergraduate loans accounted for 86.99%, while graduate loans accounted for 13.01%. The undergraduate loan balance increased 0.72% YoY, and the graduate loan balance decreased 4.58% YoY.
Private student loan originations in AY 2016/17 (Jul 2016 to Jun 2017) increased 4.71% YoY to $8.11 B. Originations in AYTD 2017/18 (Jul 2017 to Sep 2017) increased 1.21% YoY to $3.26 B. Of this, undergraduate loans accounted for 89.55% and graduate loans accounted for 10.45%.
92.11% of undergraduate private student loan originations had a cosigner in AYTD 2017/18, higher than 2008-2009 when it was 73.96%. The proportion of cosigned graduate loans originated in AYTD 2017/18 was 62.20%.
MeasureOne has created the Private Student Loan Consortium, a data cooperative of the nation’s largest lenders and holders of private student loans. Additionally, the Q3 2017 report includes nine new data contributors, College Ave Student Loans and 8 members from the Education Finance Council.
Interested in participating in this initiative for increasing transparency in the Private Student Loan market? Contact us here.