sovereign-investor.com / By Evaldo Albuquerque / November 30, 2012
Another stupid government policy is finally showing its disastrous results.
I wrote about the government-created student loan bubble about a month ago, when I showed how, over the last 10 years, tuition costs have greatly outpaced income growth.
Data released by the Federal Reserve Bank of New York this week showed that U.S. student-loan debt rose by $42 billion, or 4.6%, to $956 billion in the third quarter. But there’s something more concerning than this increase in debt.
The chart below shows the percentage of student-loan balances that were 90 or more days behind at the end of September. Although this recent spike is really bad, we can’t say it’s surprising.