A new study shows a change in student loan delinquency rates.
Normally, student loans have the highest delinquency rate of any form of consumer debt. However those rates have declined.
While some think it’s due to the COVID-19 pandemic, the study shows that it is because of government forbearance programs.
While forbearance programs keep the rate of delinquencies low in the short term, the fact is that student loan debt has increased heavily in the past 15 years. This has seen a trend of higher delinquency rates.
Since 2005, student loan debt has grown over 330%, versus total household debt, which rose by 56%. Apart from mortgages, student loans are now the largest source of consumer debt, accounting for 35 percent of non-mortgage household debt.
This has brought on a discussion between the Biden Administration and Congress about ways to relieve student loan delinquency.