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Thu Feb 28, 2013, 12:24 PM

 

Delinquencies On Student Loans Surpass Those On Credit Card Debt

http://www.zerohedge.com/news/2013-02-28/delinquencies-student-loans-surpass-those-credit-card-debt

Those who have been following our year-long series exposing the student debt bubble are by now well aware that this latest $1 trillion+ reincarnation of subprime will have a very unhappy ending. Which is why today's release of the quarterly Fed report on household debt and credit will hold few surprises for them. There is however, one data point which is notable: as of December 31, 2012, the soaring delinquency rate on student loans (first reported here, and subsequently confirmed by the Fed itself), has surpassed that of credit card debt.



Which makes perfect sense: because as consumers are still aggressively deleveraging their revolving balances, they are simply replacing them with far cheaper, Federally-funded credit in the form of non-revolving student debt, which as all know, is used for most other purposes but paying down study-related expenses. And why not: since the government is providing a cheap credit subsidy to the big banks, why should consumers not find the cheapest cost of funding. That everyone else will have to pay for this blow up when it ineivtably does happen, as every credit bubble always ends, is a different story.

And as a tangent, these three charts should effectively explain why the "Housing recovery", i.e., the second housing bubble is in full force in California and Nevada.

The epic California debt balance per capita:



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Reply Delinquencies On Student Loans Surpass Those On Credit Card Debt (Original post)
Mutatis Mutandis Feb 2013 OP
SoCalDem Feb 2013 #1
KansDem Feb 2013 #2
Skittles Feb 2013 #4
Egalitarian Thug Feb 2013 #3
IdaBriggs Feb 2013 #5
Egalitarian Thug Feb 2013 #6
MadrasT Feb 2013 #7

Response to Mutatis Mutandis (Original post)

Thu Feb 28, 2013, 12:33 PM

1. That is a scary graph

and it will get worse..

Until we were into our 30's the ONLY debt we had on that graph was an $83 a month car payment..

Young people these days are seriously over-burdened, and it will get worse and worse unless something drastic is done..

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Response to Mutatis Mutandis (Original post)

Thu Feb 28, 2013, 01:04 PM

2. They'll get your Social Security one way or another...

Either through "privatization" or chained CPI.

Or by garnishing SS payments to pay off student loans since such loans are not discharged by filing bankruptcy.

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Response to KansDem (Reply #2)

Thu Feb 28, 2013, 01:46 PM

4. I believe that has already been decided

currently we are seeing the dog and pony show being put on in an effort to convince us it is for our own good

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Response to Mutatis Mutandis (Original post)

Thu Feb 28, 2013, 01:31 PM

3. K&R Something's got to give. n/t

 

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Response to Mutatis Mutandis (Original post)

Thu Feb 28, 2013, 02:26 PM

5. I have a friend who has taken on over $30K in student loan debt.

She has three associate degrees. She used the student loan money to live on while she did it.

None of her degrees have increased her earning power.

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Response to Mutatis Mutandis (Original post)

Thu Feb 28, 2013, 07:13 PM

6. Evening kick

 

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Response to Mutatis Mutandis (Original post)

Thu Feb 28, 2013, 09:04 PM

7. Wow

This is not going to end well

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