Answer:  31.5% or almost 1 in 3.

From the Federal Reserve of St. Louis, which with some simple math demonstrated that delinquency rates (payments that are more than 30 days past due) that are often quoted by the NY Federal Reserve (e.g., 17% in the 4Q 2014) are deceiving, since they include all student loan borrowers in the denominator.  However, since 45% of borrowers are not repaying their loans for any number of reasons (they may be in school, etc.), you should only include those 55% of borrowers who are in repayment in the denominator.  The long and short of their analysis is that lots of people are struggling with their student loan payments.  

This provides an opportune time to ask your students why they think so many students might be struggling with student debt (your students will certainly have additional ideas too):

• Took out too much debt (media loves stories of students with $100K in deb
• Unstable employment situation
• Didn’t finish college
• Didn’t develop the skills in college that the job market is seeking

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We have an activity to let students grapple with this issue BEFORE they go to college:  How Much Should I Borrow For College?

Other Resources:

• Wall Street Journal article:  Student Loan Problem Is Even Worse Than Official Figures Indicate

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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