Small Loans, Big Risks Major Consequences for Student Debtors

The steep increase in college tuition and student debt over the past decade has led the country to engage in a serious debate about the need to reduce college costs and student borrowing. In this brief, the author uses data from Experian, one of the three major credit rating bureaus in the United States. The analysis examines the repayment status of student loan borrowers, analyzing the nature of student loan defaults and delinquencies, and the role of student loan balances on an individual’s overall financial security. As the brief shows, there is no “safe” amount of student debt: borrowers with small balances struggle to repay them at the same rate as borrowers with higher balances. That’s why this brief concludes with a series of policy reforms to address the underlying causes of rising student loan debt and the very real struggles millions face in repaying their loans.