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Has The Student Loan Bubble Burst?

Via Human Events:

ZeroHedge has been waiting for the student loan “bubble” to pop, and they think the “quite ghastly” third-quarter numbers might just be the beginning of the end.  Total federal student loan debt (which is only part of the short-circuiting student loan system) shot up $42 billion to hit a “gargantuan” $956 billion.  Even worse, there was a huge spike in the two worst parts of the delinquency spectrum: new delinquencies, and past-due balances that have aged beyond the 90-day threshold, at which point debts become exponentially more difficult to collect.

According to the Federal Reserve, “Of the $42 billion, $23 billion is new debt while the remaining $19 billion is attributed to previously defaulted student loans that have been updated on credit reports this quarter. As a result, the percent of student loan balances 90+ days delinquent increased to 11 percent this quarter.”  No balance sheet with 11 percent of a massive liability floating in the 90-day Sargasso Sea is in good shape. . .


Pop. . . - Greg Pollowitz


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