Bankers Concede to Dreary Student Loan Predictions
A majority of US banking experts now concede that student loan debt is a serious problem and predict that a large percentage of students will increasingly have trouble paying off their high cost loans, according to a quarterly survey of US banking risk managers.
The survey, conducted by the credit risk analysis firm FICO, shows over sixty percent of risk managers surveyed confirm that student loan debt delinquencies will only increase in the next six months.
Only 13 percent expect delinquencies to decrease.
An even closer analysis of the quarterly survey shows that banking experts' concerns have exponentially increased over recent months. Nearly 64 percent of the bankers surveyed in the previous quarter and about half of all surveyed in the first quarter had predicted a steady increase in student loan delinquencies.
The US Education Department projects that roughly one in five borrowers who took out federal loans for undergraduate study will default at some point in their lifetime.
The FICO survey adds to fears that the student loan crisis could result in a similar burst seen in the 2008 mortgage crisis, and an overwhelming feeling of desperation felt among young borrowers struggling to find employment, let alone ways to pay off sky high loans.
According to another recent survey, an alarming one in five US households are buried in student debt. Total student loan debt in the US suprassed the $1trn mark earlier this year.