Latest MeasureOne data confirms private student loan market is returning to pre-pandemic norms

Overwhelming majority of private student loan customers are making regular payments again, originations are rebounding, forbearance usage is declining and default rates are at or near historic lows

SAN FRANCISCO, December 21, 2021 /PRNewswire/ — MeasureOne today released its semi-annual Private Student Loans Report, a cutting-edge research report leveraging MeasureOne’s custom analytics services. This 17th edition of the report confirms that the private student loan market has stabilized and returned to pre-pandemic norms: students and families continue to manage payments effectively, the overwhelming majority are reluctant to make regular payments despite the pandemic – and mounts rebounded 5.8% on the same time last year. In addition, forbearance levels have normalized and currently stand at 2.4% of loans in repayment, with less than 2% of loans in default each year. Previously, forbearance levels had increased as lenders helped families who were struggling due to the pandemic.

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Private student loans, which are fully underwritten to assess creditworthiness and repayment capacity, represent approximately 7.6% of total outstanding student loans in Q2 2021. The remaining 92.4% of $1.72 trillion in student loans are federal loans owned or guaranteed by the Department of Education.

“The fact that delinquencies and defaults remain near all-time lows while forbearance rates have returned to pre-COVID levels, reaffirms how strong underwriting and focus on capacity refunds drive customer success,” said Elan Amir, CEO of MeasureOne. “This is a well-functioning market with strong safeguards in place to meet the challenges posed by the pandemic. Additionally, the increase in creations – after a decline last year – could very well signal that we We’re on the way to a rebound in terms of college enrolment.”

The Private Student Loans Report (“Report”) reflects data as of the end of the third quarter of 2021 for private student loans and does not include federal student loan data. The total outstanding private student loan balance represented in the report was $55.41 billion (including school loans but excluding consolidation, refinance and parent loans). Undergraduate loans accounted for 89.53% and graduate loans 10.47% of loans issued in AYTD 2021/22.

Performance attributes for this quarter continue the positive recovery shown in the last report. At the end of the third quarter of 2021, the report revealed:

  • Forbearance use fell 65% at the end of Q3 2021 to 2.44% from a peak of 7.04% in Q2 2020 as borrowers were able to leave relief programs sector customers.

  • The early-stage default rate (30-89 days past due) was 2.22% of loan balances in repayment (excluding defaults as usual), and similarly, the late-stage (more than 90 days late) default rate was 0.94%. Both are near historic lows.

  • Gross annualized write-offs were 1.35% of loan balances in repayment and are near historic lows.

  • After a 17.3% decrease in creations during YY 2020/21, creations for the first quarter of YY 2021/2022 increased by 5.8% compared to the same quarter last year to reach $3.72 billion.

The semi-annual report includes ongoing contributions from the five largest student loan lenders and loan holders: Citizens Bank, NA, Discover Bank, Navient, PNC Bank, NA and Sallie Mae Bank. Additionally, the report includes data from 9 other student lender contributors. In total, these contributors represent the vast majority of educational arrangements and the majority of outstanding private student loans in the United States.

The full report on private student loans is available for download at https://www.measureone.com/resources

About MeasureOne

MeasureOne, the leading consumer-authorized data exchange platform, is transforming the way businesses access and use consumer data. MeasureOne enables organizations to access a wide range of trusted consumer data while prioritizing privacy and consent. Using the MeasureOne platform, businesses can confidently and reliably integrate and verify consumer information such as income, employment, education, and student enrollment. MeasureOne offers flexible implementation options for businesses to easily leverage consumer-authorized data, from a developer-friendly API to third-party integrations. MeasureOne is headquartered in San Francisco. For more information on MeasureOne, visit www.measureone.com.

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