CHICAGO and WASHINGTON, D.C. — Finance managers trying to
finalize that vehicle contract for a new college graduate might continue to
have trouble getting that debt-to-income ratio at a point where the paper is
purchased by a finance company.

A new Google Consumer Survey commissioned by TransUnion of
consumers who graduated from college in the last five years revealed that a
quarter (25.1 percent) of recent graduates currently have $30,001 to $45,000 in
college debt, and an additional 17.2 percent of respondents said they have more
than $45,000 in student debt.

"College debt can be one of the most challenging types of
debt, simply because you are allowed to put off repayment  — and thinking about
the money you owe  — until after graduation," said Julie Springer, vice
president at TransUnion responsible for consumer education.

"Graduates should take time to review their credit report on
an ongoing basis to understand not only the amount of college debt they owe,
but also to identify areas to work on and spot any inaccuracies that could
possibly indicate identity theft," Springer continued.

And graduates aren't the only party being asked to consider
the ramifications of large amounts of student loan debt.

The federal bank regulatory agencies — which include the
Federal Deposit Insurance Corp., the Federal Reserve Board and the Office of
the Comptroller of the Currency — recently issued a statement encouraging financial
institutions to work constructively with private student loan borrowers
experiencing financial difficulties.

"Prudent workout arrangements are consistent with safe and
sound lending practices and are generally in the long-term best interest of
both the financial institution and the borrower," federal officials said.

"Student loan borrowers who are unemployed or underemployed
may face hardship in making payments on their private student loan debts after
separation from school or during periods of economic difficulty," they
continued.

"Current interagency guidance permits prudent workout and
modification programs for retail loans, including student loans, and provides
that extensions, deferrals, renewals and rewrites may be used to help
borrowers overcome temporary financial difficulties," officials went on to say.

"Institutions that have private student loan workout
programs should provide borrowers with information that clearly explains the
programs, including eligibility criteria and the process for requesting a
modification," they added.

TransUnion warned student loan borrowers about the
ramifications of getting behind on repayments, which can severely damage
chances that vehicle financing can be secured at the most desirable terms.

"It's never OK to skip a student loan payment. While most
programs offer a deferment option — where you can legally skip a payment — it
only prolongs your repayment process," TransUnion said.

"Skipping payments without a deferment means defaulting and
then dealing with dings on your credit report and a potentially lower credit
score," the agency continued. "Make your student debt a priority each month so
you can take care of it quickly and without hurting your future ability to
borrow."

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