"JOELLE SCALLY: More than 10% of balances were past due. That means that they've missed at least three payments. TURNER: Joelle Scally is a policy economist at the New York Fed. And she says, considering the overall federal loan portfolio is now $1.6 trillion, 10% is a lot of money. And it's up from about 8% the quarter before. There's also another trove of new data that tells a similar story."
"MANGRUM: One in 3 federal student loan borrowers that are in repayment right now are in some stage of delinquency. TURNER: Especially worrying are the borrowers in late-stage delinquency because they're so close to defaulting on their loans, which can trash their credit and have all sorts of terrible consequences. Default happens after at least nine months of missed payments, and that new Education Department data shows a lot of borrowers are dangerously close to that."
More than 10% of federal student loan balances were past due, meaning at least three missed payments, up from about 8% the prior quarter. The overall federal loan portfolio totals roughly $1.6 trillion, so rising delinquency represents a substantial dollar amount. One in three borrowers in repayment are in some stage of delinquency, and roughly 4.3 million borrowers are nearing default. Default follows at least nine months of missed payments and can severely damage credit and produce other negative consequences. Pandemic-era safeguards had prevented many defaults; the end of those protections has pushed many borrowers toward default simultaneously.
Read at www.npr.org
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