The South Posts Worst Student Loan Delinquencies
Jan 30th, 2019 @ 5:16 PM by Amber Nelson
Student loans may be second place in size compared to mortgages when it comes to household debt, but they are first in delinquency rates, according to data from Student Loan Hero.
The report found that the average delinquency rate among student loan borrowers in 100 of the nation’s largest metro area was 18.8%. (Delinquencies are defined as loans with payments that are late by 90 days or more.) That is an enormous gap between consumer loan delinquency rates, just 2.3% in the third quarter, according to the Federal Reserve Bank of St. Louis. Collectively, borrowers owe roughly $1.5 trillion in student loan debt.
Broken down by region, student loan delinquencies are worst in the South. Among the top 10 metro areas by delinquency, only one – Toledo, Ohio – was not in the South. Jackson, Miss. has the highest delinquency rate in the country at 25.6%. Next highest are Lakeland-Winter Haven, Fla. with 23.4% and Daytona Beach, Fla. with 23.3%. the rest of the top ten are made up of Memphis, Tenn., Toledo, Ohio, Chattanooga, Tenn., Jacksonville, Fla., Miami, New Orleans and Baton Rouge, La.
The top ten metro areas with the lowest delinquency rates were not as concentrated in but half were in the West and four in California. Provo, Utah took the number one spot with a student loan delinquency rate of 12.8%. San Jose, Calif. was second with 14.1% and Madison, Wis. was third at 14.4%. They were followed by Harrisburg, Pa., Oxnard, Calif., San Francisco, Allentown, Pa., Boston, San Diego, and Seattle.
The delinquency rates correlated closely with the average income and educational level of the states. For example, only 12.3% of Winter Haven inhabitants aged 25 or older have a four-year degree or higher, much lower than the national average of 19.7%. Compare that to San Jose’s 66.3% graduation rate for four-year degrees and a median income of $110,040.
Borrowers who are in danger of falling behind on their payments can seek help by refinancing their student loans or switching payment plans into things like income-based repayment.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.