As a debt collection agency or financial institution, any news of lower delinquency rates is good news. According to the National Credit Trends Report by Equifax, 2011 was a rebound year for debt payments in the United States.
In October 2008, during the start of the recession, the United States' total consumer debt stood at $12.4 trillion. It was at its peak as Americans were beginning to feel the effects of a steadily weakening employment rate, a stagnating economy and financial practices on main street that strapped the average American. However, 2011 has shown significant strides, as the overall consumer debt dropped approximately 11 percent to $11.1 trillion. Debt rates among the retail and bank credit card, mortgage, consumer finance and auto sectors dropped significantly during 2011. However, Equifax revealed the one sector that failed to show improvement was student loans, which experienced a rise of 1 percent in debt delinquency levels from 2010. "The improvement in 2011 delinquency data, paired with consistent growth in loan originations in multiple sectors, provides truly positive momentum for the industry as we begin a new year," said Michael Koukounas, Senior Vice President Analytics for Equifax. "More than 63% of all past due balances are from loans originated between 2005 and 2007, and as the industry continues to isolate and manage those vintages, I would expect to see continued improvement in delinquency rates as a result." According to the National Center for Education Statistics, the average cost of tuition, room and board at a 4-year undergraduate, academic institution was $32,475 during 2010, and the price seems to only rise as the years go on. Providing a student with financial aid may require increased leniency and lower interest rates on the part of the financial provider as individuals straight out of college may find it difficult to immediately pay off huge debts. Overall, 2011 was a positive year for consumers. While credit cards and auto loans were paid off increasingly during the year, collection agencies should consider reminding debtors who have recently repaired some of their bad credit to pay off their remaining outstanding debts.