US student loan debt eclipses the $1.2tn mark for 3Q
US student loan debt has eclipsed the $1.2tn mark in the 3Q 2015, says the Federal Reserve.  Total repayments more than 90 days' overdue hit 11.6%, up from last year, making student debt delinquency now worse than mortgage delinquency at the peak of the housing crisis.  This reveals that rather than improving, the student loan problem is steadily worsening, despite the availability of government programmes to help borrowers stay current on their loans.

Student loan borrowers are still struggling to pay back their debts, despite the availability of government programs to help borrowers stay current on their loans.

The share of borrowers at least 90 days delinquent in paying of their loans ticked up to 11.6% in the three months leading up to October from 11.5% the previous quarter, according to data released by the New York Federal Reserve Thursday.

This chart shows the share of borrowers struggling to pay back their student loans. New York Fed.

The 11.6% statistic likely understates the problem, according to the NY Fed, because about half of the loans included in the calculations aren’t in active repayment, instead borrowers are in a grace period or in other programs that allow them to postpone loan payments, but possibly still accrue interest. The share of borrowers actively repaying their student loans, who are delinquent or in default on their payments is likely twice as high as the reported 11.6%, the NY Fed economists said in the report.

Data released on the federal student loan program released by the government Thursday adds to the evidence that borrowers are having difficulty staying current on their loans. About 910,000 federal loan recipients are between 181 and 360 days delinquent on their loans as of the end of September, compared to 800,000 during the same quarter last year.

The high rates of delinquency and default are troubling given that the government provides a slew of options to federal student loan borrowers who are struggling to repay their loans. Borrowers can make payments tied to their incomes, which can sometimes be as low as zero and still technically be in repayment on their loans.

If you’re a borrower with a federal Direct Loan — that’s the case for most recent college graduates with federal debt — you can use this chart as guide to finding the repayment plan that’s best for you. Borrowers with Federal Family Education Loans may not qualify for some of the income-driven repayment programs listed below unless they consolidate their debts into Direct Loans. Terrence Horan/MarketWatch

The Consumer Financial Protection Bureau recently found that one in four student loan borrowers are in default or struggling to stay current on their loans. Borrowers may be suffering needlessly, the bureau noted in its report, in part because servicers, the companies that manage student loan repayments, aren’t providing borrowers with enough or clear information about their options to manage their payments.

In addition to the slight uptick in delinquency and default rates, student loan debt overall rose by $13 billion last quarter and $77 billion over the last year, according to the New York Fed. It now stands at $1.2 trillion.