A new kind of subprime borrower is starting to influence the statistics gathered by Equifax.

Jennifer Reid, the senior director of product marketing at Equifax Automotive Services, acknowledged that dealers and finance companies typically think of subprime consumers as ones with delinquencies, defaults and bankruptcies.

But Reid pointed to the slight uptick in subprime vehicle leasing in April that potentially was booked through special captive finance company programs geared to recent college graduates who might be carrying student loan debt and need the flexibility of a manageable monthly payment.

“When you start charting subprime, you normally just think of 640 and below,” Reid told SubPrime Auto Finance News during a recent phone interview. “But on the retail side, you’ve got to start to think about what’s making up those numbers. They’re not necessarily the subprime customers who have a lot of delinquencies or issues from the past. You’ve got a lot of special captives targeting that younger, first-time college graduates. It may be just someone with a thinner file or no credit. You’ve got a lot of college graduates with special programs out there.”

According to a recent study by the Federal Reserve Bank of Cleveland, analysts cited data from the Consumer Financial Protection Bureau, which estimated that student loans outstanding currently total about $1.2 trillion. That figure is spread among 40 million borrowers, or an average debt of nearly $30,000 per student.

Despite that large amount of debt that’s required to be repaid to federal outlets and cannot be discharged through bankruptcy, Ann Marie Wiersch pointed toward the positives of the situation. Wiersch is a senior policy analyst at the Federal Reserve Bank of Cleveland.

“The range of debt burden varies tremendously from student to student, though many of the graduates with the heaviest debt burden land high-income professional jobs — doctors or attorneys, for example — that put them in a strong position to repay the debt,” Wiersch wrote in a research study posted earlier this year.

“Experts believe that a majority of student loan defaults are concentrated among those who did not complete their education — their default rates are four times higher than those of graduates,” Wiersch continued. “This is not surprising, since many of these dropouts, unlike graduates, are no better able to repay than they were before enrolling.”

Even if these consumers complete their degree, the challenge of finding gainful employment is another element complicating the situation for these potential borrowers, according to Reid. She expects underwriting departments to see more applications arrive with student loan debt registering as a significant part of the background being brought into the situation.

“I think it’s a discussion you’re going to see more of, especially in the next couple of years, and the impact it’s going to have on that demographic getting vehicles,” Reid said. “When you’ve got high loan debt coupled with high unemployment, and they need a car, that equation doesn’t always work well together. That’s definitely going to be a discussion going forward especially with so many vehicles in the next 10 years expected to be sold in that segment.

“On the dealer side as well, they’re going to have to get more comfortable with working with that demographic of customers to have those conversations about having the right vehicle to meet the needs of that demographic,” she continued.

Topics that are going to influence the vehicle financing industry both long-term and in the immediate future such as student loan debt are going to be highlighted throughout the second annual SubPrime Forum, which is again a part of Used Car Week. The SubPrime Forum, orchestrated in conjunction with the National Automotive Finance Association, will have keynote presentations and panel discussions covering subjects such as originations, compliance and more.

“Dealers and lenders are educating themselves and getting more information,” said Reid, part of the Equifax team who will be joined by other SubPrime Forum speakers from firms such as Black Book Lender Solutions, Hudson Cook and Dealertrack Technologies.

“There’s a lot of questions being asked. There’s quite a bit of dialogue happening. As an entire industry, we’re all talking about the changing environment because it’s changing so rapidly,” Reid continued.

“I think it’s very promising to see everyone coming together to talk through some of the challenges that are already here or are on the horizon. They’re recognizing the momentum and trying to find ways to keep it,” she went on to say.

The SubPrime Forum is scheduled for Nov. 11 and 12 at the Red Rock Casino, Resort & Spa in Las Vegas.

For more details about the SubPrime Forum as well as the opportunity for registration discounts, go to subprime.autoremarketing.com.