The Student-Loan Problem That Won’t Go Away
“There’s at least one big reason the Trump administration and congressional Republicans are looking to revamp student lending. Consider the New York Federal Reserve’s latest snapshot of household credit in the U.S. During the recession, delinquencies on all types of consumer debt spiked. Then, starting around 2011, delinquencies on credit-card debt and auto loans, along with mortgages, dropped as unemployment fell and the economy healed. Student-loan delinquencies never did. Instead, they continued rising through 2012 and have remained exceptionally high. At this year’s start, 11% of the nearly $1.4 trillion in student debt was delinquent—sitting in an account that hadn’t received a payment in at least 90 days. And that figure understates the problem. Roughly half of all student debt is held by borrowers who aren’t required to be making payments because they’re still in school, unemployed or for other reasons. Strike out those instances and the share of delinquent student debt is more like 22%, the New York Fed says.”