To The Moon

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Student loan suspension ends on 31 Aug 2023. Payment of the student loan resumes in September 2023. The total student loan stands at USD$1.757 trillion ~ USD$1,757,000,000,000.

This was one of the items implemented as Covid19 containment and with repayment to resume, we can expect some troubles to follow. This is $1.757 trillion that stems from 45.3 million who owe an average of $28,950 per pax. Unfortunately, an estimated 10.8 million student loans are at risk of default.

With an increase in the cost of living (from sticky inflation), this will doubtless add to the burden when repayment resumes in 3 months. However, there is an alarming 10.8 million loans facing default. This should add to the waves of financial turmoil in the market and the larger economy.

screenshot from a CBS news article about the US hitting $1T credit card debt

Will this plunge more into a debt crisis as America chalk up a record nearly $1 trillion of credit card debts?

With the debt ceiling saga clearing the House, the government looks to borrow more money from the future to pay for its current expenses. Let us not forget that the interest paid to these loans (in bonds and treasury bills) has already exceeded the defence spending. This will mean lesser for healthcare, education, infrastructure and other policies. The debt ceiling will be risen eventually but the cost back to the US could be exponential.

If the government could not spend within its means, the burden of debt will be passed to future generations and de-dollarisation should expect to continue. Let us continue to monitor with caution. With overbuying from the recent AI frenzy, we can expect some corrections to happen soon.

Here is the research on Student Debt that I extract from Google Bard:

Status of Student Debt in USA

The current status of student loan in the USA is that payments have been paused since March 2020 due to the COVID-19 pandemic. The pause has been extended several times, and it is currently scheduled to end on August 31, 2023. When the debt suspension ends, borrowers will be required to resume making payments on their loans. The amount of each payment will depend on the size of the loan, the interest rate, and the repayment plan that the borrower chooses. There are a few things that borrowers can do to prepare for the end of the debt suspension. First, they can make sure that they are enrolled in a repayment plan that they can afford. Second, they can start saving money to make their payments. Third, they can contact their loan servicer to get more information about their options. The end of the debt suspension will have a significant impact on borrowers. For many borrowers, it will mean that they will have to start making monthly payments on their loans for the first time in over two years. This can be a financial hardship for some borrowers, especially those who are struggling to make ends meet. However, there are also some benefits to the end of the debt suspension. For example, borrowers will no longer be accruing interest on their loans while they are in repayment. This means that they will pay less interest over the life of their loans. Overall, the end of the debt suspension will be a significant change for borrowers. It is important for borrowers to understand their options and to prepare for the end of the suspension so that they can make the best financial decisions for themselves. Here are some additional things that borrowers can do to prepare for the end of the debt suspension:

• Create a budget: This will help you to see how much money you have coming in and going out each month. This will help you to determine how much you can afford to pay on your student loans each month.

• Make a payment plan: Once you know how much you can afford to pay each month, you can create a payment plan. This will help you to stay on track with your payments.

• Contact your loan servicer: If you have any questions about your student loans, you can contact your loan servicer. They can help you to understand your options and to create a payment plan.

Impact of the Student Debt

What is the amount of student debt, the average amount per loan and the number which are at risk of default?

As of March 2023, the total student loan debt in the United States is $1.757 trillion. The average amount per loan is $37,338. The number of student loans at risk of default is estimated to be 10.8 million. The following table provides more detailed information on student loan debt in the United States:

Breakdown of Student Debt (from Google Bard)

The student loan debt crisis is a major economic issue in the United States. The high cost of college has made it difficult for many students to repay their loans, and the number of borrowers at risk of default is growing. The government has taken some steps to address the crisis, such as extending the repayment period and providing income-based repayment plans, but more needs to be done to help borrowers get out of debt.

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