Federal student loan repayments are troublingly low
Roughly 43 percent of student borrowers are not making payments on the more than $200 billion they owe in federal student loans.
It's an alarming figure that's raised concerns that millions of those delinquent borrowers will never repay what they owe, according to The Wall Street Journal.
The new figures represent the fallout of a decade-long borrowing boom as record numbers of students enrolled in trade schools, universities and graduate schools.
While most have since left school and joined the workforce, 43 percent of the roughly 22 million Americans with federal student loans weren't making payments as of Jan. 1.
Student loan debt surpassed $1.2 trillion in 2015.
According to the Journal, this is the breakdown of the Education Department's student loan portfolio:
Current: 12.5 million borrowers
In default (one year without making a payment): 3.6 million borrowers
Delinquent (at least a month behind): 3 million borrowers
In postponement: 3 million borrowers
The student loan non-payment rate a year ago was 46 percent, compared to 43 percent now, Money reports. Though that slight improvement in the payment rate may look promising, Money notes that the dip is mainly due to more borrowers joining payment plan programs for distressed borrowers, which allows them to pay a smaller percentage of their income on their loan.
Money said enrollment in income-based repayment programs hit 4.6 million in the past year, a 48 percent increase.
Still, some members of Congress and the Consumer Financial Protection Bureau blame loan servicers for not doing enough to talk struggling borrowers into signing up for the income-based payback programs that often let them slash their monthly loan bill.
"The servicers aren't quite promoting them in the way they should be — I think some of it's information failure," said Rachel Goodman, a staff attorney at the American Civil Liberties Union.
But Navient Corp., one of the companies hired by the government to collect debt, said it reaches out to borrowers between 230 and 300 times before they default. Navient's research suggests that student loan borrowers prioritize other bills, such as car loans, mortgages and heating bills over student loan payments, The Journal reported.
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