Total student loan balances have topped $1.3 trillion, up 170 percent from 2006, according to a report from the New York Federal Reserve. Ten years on and it's not just the numbers that stand out, but the distribution of the debt. 

The proportion of total debt held by those who owe more than $100,000 has shrunk record levels, meaning the fate of the student debt market is in the hands of fewer borrowers. "While about 36 percent of student debt holders owed less than $10,000, and 65 percent owed less than $25,000, only about 5 percent of student debt holders owed more than $100,000 in debt in 2016," the NY Fed said. 

"Yet these big-balance borrowers account for nearly 30 percent of the total balances outstanding, so their outcomes and repayment success have a disproportionate influence on the overall picture." 

In the past, this had not been of concern with delinquency rates lower amongst higher borrowers, but this trend is changing. "The default rates among higher-balance borrowers have worsened notably in recent years. Further, payment progress is slower among those who borrowed more," the NY Fed said. (See also: Trump’s Student Loan Repayment Plan: Could It Help You?)

Elsewhere, The NY Fed found that progress of payment is slower among those who borrowed more and the introduction of income-based payment plans has dragged the pace down. Additionally, growing delinquencies is dragging down repayment.  

By the age of 30, of students who graduated between 2006-2011, 52 percent had never defaulted, and of this group, the average credit score was 744, and 36 percent of them owned a home. At the other end of the scale, 31 percent of people had ever defaulted, and this subset had an average credit score 549 and 3 percent owned a home. 

The report was conducted by Rajashri Chakrabarti, Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw.

 

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