Simply deleting this item from
the Drafts folder about a Wall Street Journal story
last week that, along with a lot of other anecdotal and statistical data in
recent months, suggests a looming disaster for student loans in this great
nation … well, that just didn’t seem like a wise thing to do.
The number of student loans
held by subprime borrowers is growing, and more of those loans are souring,
the latest signs that a weak job market and rising debt loads are squeezing
recent graduates.
In all, 33% of all subprime
student loans in repayment were 90 days or more past due in March 2012, up
from 24% in 2007, according to a Wednesday report by TransUnion LLC.
Meanwhile, the Chicago-based
credit bureau found that 33%
of the almost $900 billion in outstanding student loans was held by subprime,
or the riskiest, borrowers as of March 2012, up from 31% in
2007.
“If you become subprime, it’s
more likely that you will not pay your debt,” said TransUnion Vice President
Ezra Becker, who oversaw the study.
Indeed, Mr. Becker. As you may
have guessed, some of these borrowers weren’t subprime borrowers until they
took out student loans, quit college, and then (for obvious reasons) started
missing loan payments.
While the study didn’t provide
any details, my guess is that the percentage who became subprime borrowers
due to their student loans is very high simply because, at that age, you can
rack up a lot of student loan debt, but, as I recall, credit card companies
normally don’t give you a big enough rope to hang yourself with.
