A new analysis of college debt levels details how an income-based student loan repayment system could help borrowers. 

The report from Equifax reveals data that shows borrowers earning less than $30,000 tally triple or even quadruple the delinquency rates of their higher-earning peers. The discrepancy is most pronounced in the younger population. 

The study also shows that borrowers who have under one year of job tenure as well as those employed in part-time jobs are more susceptible to student loan delinquency. 

"Income-based repayment could help thousands of borrowers who are struggling to pay back student loans," said Dann Adams, president of Equifax Workforce Solutions. "Reducing the number of student loans in default not only benefits individual consumers, helping them maintain better credit profiles, but the  U.S. economy as a whole. Student loans are holding consumers back from making big ticket purchases - impacting both the automotive and housing markets."

Naser Hamdi, director of market insight and strategy at Equifax, said the present system for income-based repayment is too reactive.  "We need to find and help at-risk borrowers before they fall into delinquency, thus breaking a vicious cycle that could negatively impact the borrowers credit worthiness and financial health. Automated access of up-to-date borrower income and employment records could easily facilitate this type of proactive outreach to at-risk borrowers,” Hamdi said.
Click here for the full report on income-based student loan repayments.

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