More than 50 percent of student loan accounts nationwide are in deferred status as college graduates unable to find employment are returning to school and digging themselves deeper in debt.
In addition, the study released Wednesday by Chicago-based TransUnion showed deferred loans represent 43.5 percent of all student loan balances. When a loan is deferred, repayment of principal and interest is temporarily delayed.
The TransUnion study also found that student loan balances increased by 75 percent between 2007 and 2012, with the average student loan debt per borrower increasing 30 percent to $23,829.
In Iowa, the average student loan debt is $28,753 for four years of college, and 72 percent of Iowa college graduates have debt, according to the Project on Student Debt, an initiative of the Institute for College Access and Success in Oakland, Calif.
More than half of college graduates under the age of 25 are either unemployed or underemployed — the highest rate in 11 years — according to a TransUnion analysis of government data.
"With the economy either in recession or slowly coming out of it during the study period, we had expected that student loan balances might increase as consumers frustrated with the job market went back to school to work toward a different career path," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "However, the rate of growth we observed was truly eye-opening."
Between 2007 and 2012, average student loan balances per borrower increased from $18,379 to $23,829.
With more than half the student loans in deferment, and with jobless rates remaining high among recent college graduates, Becker said repayment of the loans remains a concern.
"Students can defer their loans for only a certain period, often up to three years," he said. "After that, these students can find themselves in a difficult position financially."
The TransUnion study also uncovered a disparity between federally backed student loans — those guaranteed by the government — and loans issued by private lenders.
Federal loans accounted for 92 percent of all student loan accounts and 86 percent of overall balances. Between 2007 and 2012, federal loan balances jumped 97 percent, while private loan balances only rose 4 percent.
As billions of dollars were added to student loan balances nationally between 2007 and 2012, delinquency rates began to rise 27 percent for federal loans, but fell 2 percent on private loans. The delinquency rate for federal loans 90 days or more past due was 12.31 percent in March 2012, compared with 5.33 percent for private loans.
Becker noted federal and private student loan delinquency rates are higher than most other credit products such as mortgages, home equity lines of credit, credit cards and auto loans."While the focus in recent years has been on the mortgage market, lenders need to keep an eye on student loan portfolios — and on customers who have student loan debt — as the high delinquency rates among these borrowers can spell trouble across multiple products," Becker said.