The latest research from Equifax shows a huge jump in student-loan defaults.
Severe derogatory or charged-off balances on student-loan debt rose 36% in the past year, to $3 billion, according to the National Consumer Credit Trends report released Monday. Balances in bankruptcies remained steady, at $500 million.
The large one-year jump in defaults is the most striking result of the latest Equifax consumer credit report, which analyzes data through February 2013. The total amount of student debt outstanding increased over 14% from February 2012 to February 2013, to nearly $853 billion, and the number of student loans rose 13%, to 123 million.
"Driven heavily by economic factors, including unemployed or under-employed consumers going back to school along with the rising cost of tuition, student lending has demonstrated consistent, year-over-year growth," said Equifax Chief Economist Amy Crews Cutts in a news release. "Continued weakness in labor markets is limiting work options once people graduate or quit their programs, leading to a steady rise in delinquencies and loan write-offs.".
Home-loan delinquencies, meanwhile, have fallen sharply in the last year, the report said. Severely delinquent lines of home equity credit fell 28%, to less than $10 billion, and severely delinquent balances on first mortgages fell 23%, to $375 billion.