Student Loan Delinquencies Skyrocket: The Straw That Breaks The U.S. Consumer's Back

Summary

• Student loan debt hit a record $1.6 trillion, with delinquencies spiking to 7.74% after pandemic-era payment pauses ended.
• The Department of Education is resuming aggressive collections on 5.3 million defaulted loans, causing confusion amid a 50% staff reduction.
• Borrowers are facing plummeting credit scores, pushing many into subprime status and restricting access to mortgages and auto loans.
• Rising student loan, credit card, and auto loan delinquencies signal growing financial distress; resuming student loan payments may overwhelm American consumers.

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Student Loans rose to a record $1.6 trillion in Q1'25 according to the Federal Reserve Bank of New York's recently released Quarterly Report on Household Debt and Credit.

Student Loans have more than quadrupled over the

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