MeasureOne released its Private Student Loan Report, an industry leading research report leveraging MeasureOne’s custom analytics services. This 14th edition of the report again affirms that students and families continue to responsibly use private student loans to cover college costs. While 98% of families continue to successfully manage payments and less than 2% default, annually, relief efforts in response to the COVID-19 pandemic resulted in forbearance levels above 5%.
Private student loans, which are fully underwritten to assess creditworthiness and ability to repay, make up approximately 7.9% of total student loans outstanding as of Q1 2020. The remaining 92.1% of the $1.67 trillion in student loans are federal loans owned or guaranteed by the Department of Education.
The bi-annual report includes continuous contributions from the six largest student loan lenders and holders: Citizens Bank, N.A., Discover Bank, Navient, PNC Bank, N.A., Sallie Mae Bank and Wells Fargo Bank, N.A. In addition to these MeasureOne Private Student Loan Consortium members, this report includes data from 9 other student lender contributors. In total, these contributors represent the vast majority of in-school originations and a majority of the private student loans outstanding in the U.S. Additionally, as part of compiling this report, MeasureOne surveyed data contributors on relief efforts for private student loan customers due to the impacts of COVID-19.
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In general, lenders have offered suspension in payments of up to 3 months, with interest accruing but typically not capitalizing, with the option to extend. Lenders generally follow an opt-in process for customers seeking assistance. Customers have a number of options to request assistance and most do not require any additional documentation to get relief. During the suspension of payments, lenders are not charging late fees, and lenders are not reporting these payments as missed or late to credit bureaus. Further, lenders report that co-signers and student borrowers are treated the same for purposes of the forbearances.