HIGHER EDUCATION BUBBLE UPDATE: A Beginner’s Guide To Repaying Student Loans.
Too many people, including plenty of brand-new college graduates, fall far behind on their student loan payments for no good reason.
How many? The Department of Education does not supply much data on late payments. But the student loan expert Mark Kantrowitz, using data from lenders, estimates that between one-quarter and one-third of borrowers are late paying their first student loan bill.
It can get worse as the days and years go by. Last year, the Federal Reserve Bank of New York, using 2012 data from the credit bureau Equifax, determined that 35 percent of people under 30 who were supposed to be making student loan payments each month were actually 90 or more days delinquent.
Whatever the numbers, they add up to a normalization of tardiness that can damage the credit scores of young adults. And one big reason it’s happening is the fact that many among the indebted simply aren’t sure how many loans they have, how and when to pay them back correctly and how to find and use programs for people who can’t afford the full payments.
Some useful advice, and a calculator. And note this: “Let us pause for a moment to state the plain fact that the entire college financing system is a national disgrace. College costs are high, universities don’t counsel undergraduates well enough, families get in over their heads, there are too many types of loans, the repayment options are dizzying, and lenders and the companies that collect the payments are sometimes bad actors. . . . Universities don’t always make loans easily comprehensible either. Lauren Asher, president of the Institute for College Access and Success, remembers getting a financial aid letter in graduate school with an acronym that was so confusing that she couldn’t tell whether it referred to a loan or a grant.”