After years of pandemic-era forbearance, the U.S. student loan crisis is rapidly deteriorating. In this clip from The Call @ Hedgeye, Macro analyst Josh Steiner breaks down the troubling data and warns of what’s ahead.
“When we went into the pandemic, there was this very widespread forbearance implementation where borrowers didn't need to make payments,” Steiner explains.
While official repayments resumed in late 2023, an additional grace period allowed borrowers to delay further—until now.
According to TransUnion, the percentage of borrowers more than 90 days past due has jumped to 13%, up from 8.5% in early 2020. Making matters worse, oversight of student loans is shifting from the Department of Education to the Small Business Administration (SBA)—which is simultaneously cutting its workforce by 43%.
Steiner says financial strain will intensify through Q2 and Q3 of 2025, as millions of borrowers face “significant payment shock dynamics.” The broader implications for credit markets and consumer spending could be substantial.
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