If you are one of the 44 million people responsible for repaying the $1.4 trillion in student loan debt in the U.S., there’s a good chance it’s harder for you to pay it off than those who came before you.
That’s according to some depressing facts from a new Consumer Financial Protection Bureau report released Wednesday.
According to the CFPB, 30% of borrowers who started repaying loans five years ago have not paid down their loans at all or owe even more. That could be because the amount they pay each month doesn’t even cover the interest on the loans. And that’s if you’re paying at all. More than 60% of people in this category are delinquent on their loans.
Lucky enough to escape that category? Well maybe you’re among the 40% of borrowers who owed more than $20,000 when repayment started. In 2002, this group made up only 20% of overall borrowers.
What’s worse, in 2002 only 5% of borrowers owed more than $50,000. That percentage has now more than tripled to 16%.
This is especially telling because a decade ago, 50% of borrowers could fully repay their loans within five years. That percentage has now slipped to 41%.
Even if you managed to dodge that bullet, you’re still not out of the woods. The CFPB report points out that nearly 50% of borrowers are over 34 years old when they enter repayment. In 2003, this group made up only 25% of the borrower pool.
This all means we are borrowing significantly more money to pay for education, starting the repayment process much later in life and still finding it tougher to pay down the debt than borrowers who came before us.
Employee Benefits Packages Provide Some Relief
Now that you’re probably wallowing in a pit of despair, I’ve got the slightest silver lining to pull you back out: This increasingly burdensome debt landscape has changed many employers’ benefits packages.
According to the CFPB, about 10% of companies with 40,000 or more employees use third-party student loan repayment programs to help stabilize their employees’ financial lives. These benefits also help with employee recruitment and retention. Although the percentages are not as readily available, the report also said small companies have started to offer similar benefits.
These kinds of programs are especially enticing because they can save borrowers thousands of dollars if they stay with a company long term.
Unfortunately, these programs often leave out the most vulnerable borrowers who are already in default, according to the CFPB survey. For them, income-driven repayment is an option that could provide relief, particularly if low income and unaffordable payments led to default.
Desiree Stennett (@desi_stennett) is a staff writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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