Loan Delinquency Falling Off BUT Not Student Loans : 1.1 $Trillion And Rising

The problem, like any other problem, that is out of control like student loans, can be attributable directly to the federal government that took the loans from the private sector. Obama made promises, just before the election in 2008 and again in 2012, to students that if they took out loans they will be given special consideration when they graduate for paying it back.

Loans exploded as student attended schools that they normally would not attend or could afford, but given the promises from Mr Obama for a nearly free ride on repaying the loans, the students when for the brass ring when it was presented.

The strategy was if they students wanted the free ride they would have to keep voting in those that made the promises. And if that's wasn't enough for the progressive democrats, they knew the Republicans would want to resend the loans when the deal dates were up for renewal, that the nation could not afford, the democrats could bleme the Republicans for the students pain to have to make full restitution on their loans. A win win for the democrats.

Remember, with the progressive democrats everything is always about the ideology, nothing else matters. The people and the country be dammed.

Lending Delinquency Drops in All Sectors Except for Student Loans
Source: Ericka Davis, "Student Debt: Trends and Possible Consequences," Dallas Federal Reserve, September 30, 2014

October 8, 2014

Student debt has almost doubled over the last 10 years, with total student debt above $1.1 trillion today. In a report for the Dallas Federal Reserve, Ericka Davis writes that the "serious delinquency" rate for student loans has been 11.25 percent over the last two years, far higher than delinquency in other lending areas.

The debt landscape has changed dramatically since 2003:

• In 2003, Americans had $688 billion in credit card debt, $641 billion in auto loans and $241 billion in student loans.
• But student loans have exploded, growing three times faster than auto loans.
• In June 2014, credit card debt was $669 billion, auto lending was $905 billion and student debt was $1.1 trillion.

Davis explains that student debt only grew during the Great Recession (while auto loans and credit card lending dropped) as college tuition fees continued to rise. Following the end of the Great Recession, loan delinquencies categorized as "serious" (that is, loans past due for at least 90 days) have dropped for all lending categories, with the exception of student loans:

• In the second quarter of 2014, student loan delinquency was three times the rate of mortgage and auto loan delinquency.
• The rate was three times higher than the serious delinquency rate for credit cards.

The impact on credit scores has become clear. Prior to the Great Recession, from 2003 to 2008, credit reporting agency Equifax gave risk scores to 30-year-olds with student loans that were nearly identical to the risk scores given to 30-year-olds with no student loans. But those figures began to change after 2008, and credit scores for student loan borrowers began to drop. By 2013, the average 30-year-old American without student loans had a credit score that was 24 points higher than the average 30-year-old with student loans.