NCHER Presentation

S E P T E M B E R 1 3 , 2 0 1 2

CLEARED FOR EXTERNAL USE BY RMR

SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

Lender Data

• Loan-Level Data– Pooled administrative records for all education loans originated 2005-2011– Lenders and borrowers are de-identified but borrowers can be identified across

loans within lender. – 5,456,689 unique records and 3,478,146 distinct borrower-lender pairs

• Portfolio Data– Loans originated and/or purchased by participating lenders, aggregated at the

vintage level– Performance 2005-2011 for vintages 1999 through 2011

• Qualitative Responses– Responses are lender-deidentified within question– Current terms and conditions– Current and historic underwriting policies such as use of cohort default rate,

deferral and forbearance policies, default management

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SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

Sample Lender Originations and Outstandings

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SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

Repayment in 2009 (Individuals Who Entered Postsecondary Education in 2003-2004)(BPS)

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Monthly Student Loan Payments as a Percentage Of Income, Private Student Loan Borrowers Who Began Postsecondary Education in 2003-2004

Monthly Student Loan Payment as a Percentage of Income

0 % to 5%

6% to 10%

11 to 15%

16% to 20%

21% to 25%

More than 25%

Totala 63.5 16.0 8.1 4.9 2.4 5.0 (1.86) (1.37) (0.89) (0.62) (0.49) (0.78) Attained Bachelor's Degree 43.3 18.8 14.8 8.7 4.3 10.0

(2.11) (1.57) (1.57) (1.07) (0.87) (1.93)

Attained Associate's Degree 72.3 14.5 4.6 3.5 0.6 4.4

(5.18) (3.63) (1.90) (1.68) (0.58) (1.79)

Attained Certificate 80.1 12.1 2.7 3.5 0.4 1.3

(3.06) (2.4) (1.07) (1.45) (0.38) (1.00)

No Degree, Left Without Return 72.7 15.4 5.1 2.6 2.0 2.2

(3.16) (2.66) (1.63) (0.93) (0.77) (0.84)

Source: BPS:09, restricted to individuals who had a private student loan. Standard errors in parentheses. aTotal includes respondents who are still enrolled, which are not included in a separate row in the table. Student loan payments include both private and federal loans.

SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

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Historical Origination Interest Rates (2005-2011)

SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

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Q2 2005 Origination Interest Rate History

SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

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Median Ratio of Loan Balance to Tuition and Fees

SENSITIVE & PRE-DECISIONAL NOT FOR EXTERNAL DISTRIBUTION

CFPB Recommendations

1. School certification would lead to better choices2. Consider whether bankruptcy law changes of 2005 produced

desired objectives3. Students and lenders would benefit from a comprehensive

database of education debt4. Students need better information about post-graduation outcomes5. Fix TILA definitional glitches

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