Thirty-day delinquency rates on first mortgages declined 15% in July when compared to year ago levels, but any positives on the home loan front have been offset by distressed student loan debt, new numbers from Equifax suggest.

Student loan debt remains a challenging area even as home loan debts improve. This is a major concern with reports showing homeownership among younger borrowers on the decline as they struggle with student loans and other debts.

Loan balances tied to student debt rose to $58.5 billion in July 2012 while 60-day delinquencies on education loans rose more than 14% over the previous year.

At the same time, the struggling home loan sector started to experience a year-over-year recovery, with home equity loans' revolving 30-day plus delinquency rates declining 7%. In addition, first mortgage severe derogatory rates (primarily loans transitioning to REO status) fell 17%.

"Consumers continue to improve their credit management, through higher monthly payments on card accounts, refinancing of existing mortgage debt at lower rates, and lower delinquency rates pretty much across the board," said Equifax chief economist Amy Crews Cutts. "Growth in total credit is consistent with the overall improvement in the economy – slow, but steady – with the exception of mortgage debt which is declining overall."

The student loan debt situation remains challenging even as borrowers stay ahead on their mortgage debts by refinancing and paying off more of their home loans each month.

Write-off rates among student loans increased more than 29% month-to-month from June to July.