Will there be 50B+ in student loan delinquencies in US?
The August 2024 Household Debt and Credit Report shows rising credit card delinquencies at 10.93%, increased bank provisions for losses, low student loan delinquencies, and concerns about the economy's resilience.
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The August 2024 analysis of the Household Debt and Credit Report reveals concerning trends in consumer credit, particularly with credit card delinquencies rising to 10.93%, surpassing levels seen during the Great Financial Crisis. This marks a 2.2% increase from previous figures, indicating ongoing financial strain among consumers. Banks are responding by increasing provisions for credit losses, with Capital One raising its provisions by nearly 50%. Despite expectations that student loan delinquencies would rise following the end of the forbearance period, they remain low at 0.65%, partly due to ongoing legal challenges against the administration's student loan forgiveness plan. This situation is contributing to sustained consumer spending, which is crucial for the economy's stability. However, the report also highlights a worrying increase in "seriously delinquent" auto and credit loans, suggesting potential future challenges as student loan payments resume. The analysis raises questions about the resilience of the U.S. economy in the face of these trends, particularly if consumer spending shifts significantly due to increased debt obligations.
- Credit card delinquencies have risen to 10.93%, indicating financial strain.
- Banks are increasing provisions for credit losses significantly.
- Student loan delinquencies remain low, influenced by ongoing legal battles.
- There is a notable increase in seriously delinquent auto and credit loans.
- The analysis raises concerns about the U.S. economy's resilience amid rising debt levels.
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8 commentsDefinitely feels unsustainable.
I also hadn’t heard / realized the argument that relaxing student loan repayments is bolstering economic health, but I guess it makes sense if you think of it as US government taking $465bn out of the hands of the financial institutions and giving it to their citizens instead, ish.
Please disavow me of my economic naivety!
Taking the contrarian view, how much of that is just bad spending habits vs using it to live/augment income?
Another contrarian view, how come people can’t get a second job or better job with more money?
I just would like to see more personal accountability. I don’t understand why the taxpayer needs to absorb these loans when the individual took it out on their own assuming it wasn’t predatory or illegal.
what do you know better and why aren't you selling all of your stocks? do you believe 2025 is going to be just another year for the bubble?
Already the markets have crumbled in China, real estate, stocks, ponzis what makes you think US is immune here?
I'm genuinely curious as most HN seem so hostile to comments that suggest stock market and economy goes through cycles of ups and downs and that this one might be the big one.
Too young to take a loan, let's bail them out.
Too poor to pay any tax, free ride for you plus food stamps and let's tax the rich more even though the top 5% already paid 66% of all the taxes.
I don't know how this is going to end, I'm sure we're all going to hell together though.
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