Financial topics

[Reality Check]

http://www.newyorkfed.org/householdcredit/

http://www.newyorkfed.org/research/nati ... Q22012.pdf[/quote]

One interesting comparison in this is that the entire total Student Debt to date, as of June 30th, 2012
is about the same as just the small portion of mortgage debt, that was reduced in total, during 2009, 2010 plus 2011.
According to the linked New York FED data both amounts were in the range of 900 Billion to 1 Trillion.

2008 Total Household Mortgage Debt was about 9,000 Billion vs about 600 Billion in Total Student Debt.

2012 ( June 30th ) Total Household Mortgage Debt was about 8,000 Billion vs about 1,000 Billion in Total Student Debt.

http://www.newyorkfed.org/householdcredit/

http://www.newyorkfed.org/research/nati ... Q22012.pdf[/quote]

[Reality Check]

.
Student Loan Delinquency rate: 8.9%.

Meaning payments on 8.9% of the outstanding total balance of all student loans are late by 90 days or more. As of June 30th, 2012.

This should not be confused with the percent of students who are delinquent, because such percent of student numbers are not weighted by the dollar value each individual student owes on student loans. It also should be noted that the vast majority of students who took out student loans, took out at least one loan per year of college attended, and each student loan an individual student ( or former student ) has can have a different loan delinquency status. As a result the percentage of former students with delinquent student loans is of limited value.

This 8.9% number would mean that less than 100 Billion in student loans are delinquent because there are only about 1 Trillion dollars worth of total student loans.

It should also be noted that only student loans that were ever in payment status can be delinquent, thus a substantial percentage of the loan balances which make up the denominator when calculating this 8.9% have no payments due, so, by definition, these "no payment due" loans can not be delinquent.

Student loans which have no payments due include:

1. Loans to Students who are still in college full time, regardless of how many years ago the loan was made.

2. Members of the military who have student loans and have applied for a military payment waiver, for as long as a war, such as the war in Afghanistan lasts.

3. Unemployed former students who have student loans and have applied for an unemployed payment waiver, for as many months as current law allows such a unemployed payment waiver to last.

The trend is understated by this 8.9% percent number, due to the large percentage of loans in non-payment status, but the low absolute dollar value of delinquent loans is highly relevant to the short term threat a student loan crisis poses to the U.S. economy.

See page 2 and page 10 of linked report:

http://www.newyorkfed.org/research/nati ... Q22012.pdf

[Higgenbotham]

Student Loan Delinquency rate: 8.9%.

Here's what I think is going on, bottom line, as to why there's been some recent attention to this. The Department of Education tracks and tabulates student loan defaults and I think all of the data that is quoted and retabulated in various other places comes from the Department of Education. There's a PDF I found which has more specific default data on it than anything else I've run across:
http://ifap.ed.gov/eannouncements/attac ... ttach2.pdf

It's quite interesting that the data on this PDF is exactly a year old, being as of September 30, 2011, and the PDF was published on November 7, 2011, and is probably due to be updated to show the numbers through September 30, 2012.

The third set of numbers shows the cohorts for the years 2005 through 2009 and their cumulative default rates through September 30, 2011 based on loans, not dollars. This is the closest thing I can find to an actual default rate on student loans besides what has been recently reported in the press, but the recently reported numbers have been limited to the 2009 cohort.

A 3-year cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year. Please refer to the Cohort Default Rate Guide for a more in-depth description of cohort default rates and how the rates are calculated.

The U.S Department of Education releases official cohort default rates once per year. The FY 2009 official 3-year cohort default rates, the first official 3-year cohort default rates available, were delivered to both domestic and foreign schools on September 24, 2012, electronically via the eCDR process. All schools must enroll in eCDR to receive cohort default rate notification. Schools may check their eCDR enrollment online or by calling CPS/SAIG Technical Support at 800-330-5947.

Secretary Duncan announced that the FY 2009 3-year national cohort default rate is 13.4 percent.

http://www2.ed.gov/offices/OSFAP/defaul ... t/cdr.html

http://studentaid.ed.gov/about/data-cen ... nt/default

[Reality Check]

Student Loan Delinquency rate: 8.9%.

Here's what I think is going on, bottom line, as to why there's been some recent attention to this. The Department of Education tracks and tabulates student loan defaults and I think all of the data that is quoted and re-tabulated in various other places comes from the Department of Education. There's a PDF I found which has more specific default data on it than anything else I've run across:
http://ifap.ed.gov/eannouncements/attac ... ttach2.pdf

It's quite interesting that the data on this PDF is exactly a year old, being as of September 30, 2011, and the PDF was published on November 7, 2011, and is probably due to be updated to show the numbers through September 30, 2012.

The third set of numbers shows the cohorts for the years 2005 through 2009 and their cumulative default rates through September 30, 2011 based on loans, not dollars. This is the closest thing I can find to an actual default rate on student loans besides what has been recently reported in the press, but the recently reported numbers have been limited to the 2009 cohort.

A 3-year cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year. Please refer to the Cohort Default Rate Guide for a more in-depth description of cohort default rates and how the rates are calculated.

The U.S Department of Education releases official cohort default rates once per year. The FY 2009 official 3-year cohort default rates, the first official 3-year cohort default rates available, were delivered to both domestic and foreign schools on September 24, 2012, electronically via the eCDR process. All schools must enroll in eCDR to receive cohort default rate notification. Schools may check their eCDR enrollment online or by calling CPS/SAIG Technical Support at 800-330-5947.

Secretary Duncan announced that the FY 2009 3-year national cohort default rate is 13.4 percent.

http://www2.ed.gov/offices/OSFAP/defaul ... t/cdr.html

http://studentaid.ed.gov/about/data-cen ... nt/default

The number that is thrown around by all sources, that I have seen, for total student loans, to date, in the U.S. Economy is slightly below, or slightly above $1,000 Billion ( 1 Trillion ). This number includes all types of federal government issued student loans, all types of private student loans guaranteed by the federal government, and all types of private student loans which are not guaranteed.

The only deliquency number, that I have seen, that applies to that entire 1 Trillion is the 8.9% in the linked New York Federal Reserve report, current as of June 30th, 2012.
See Pages 2 and 10 of the linked NY Fed report:
http://www.newyorkfed.org/research/nati ... Q22012.pdf


Many other delinquency percentages are quoted, but they are related only to a slice of a slice of the entire $1,000 Billion.

Other delinquency percentages, that I have seen, are also either the percent of some group of students ( or former students ) in default on their student loans, or the percent of the number of student loans in default compared to the total number of loans in the group of student loans being analysed. All such percentages being unweighted by the actual balance of the individual loans and treating a $12,000 loan balance the same as a $500 dollar loan balance when calculating the percentage. The vast majority of individual students who use student loans will have multiple student loans with widely varying balances.

As you pointed out above the 13.4% is only related to student loans made in year 2009, or before year 2009, and only Federal Guaranteed loans. As you also pointed out these included only some of the Federal Student Loan programs, and do not include other federal student loan guarantee programs nor private student loans without a federal guarantee.

I have also seen delinquency numbers between 20% and 30% quoted, but when you dig into them they only apply to an even smaller slice of a slice of the entire $1 Trillion.

The 8.9% is the apparently the only delinquency number that applies to the entire $1 Trillion in student loans which also uses the weighted average loans balances, and is also current through June 30th, 2012. When trying to determine the short term to middle term impact of the Student loan crisis the 8.9% number appears to be the most useful. 8.9% is the total dollar value of all student loans which are 90 days or more past due, when compared to, or divided by, that $1,000 Billion ( 1 Trillion ) total dollar value of all student loans of all types.

I would agree that the slice and dice delinquency rates are more useful in predicting trends in the student loan crisis for the middle term to long term, but in making such predictions one must also take into account recent law changes to the federal student loan program ( both by statute and by executive order ) that will prevent and/or delay student loans going into default, and will then make the majority of such delinquencies temporary in nature, going forward. This is a major difference between the student loan balances and the mortgages loan balances; Once in delinquency the majority of mortgages end up as a full or partial write off while student loans can easily have their defaults cured and returned to performing loan status.

Less than $100 Billion of student loans in default ( 8.9% of 1 Trillion ) to date is relatively small compared the approximately $1,000 Billion of mortgage loans in default since 2008.

[OLD1953]

JP Morgan/Bear Stearns taken to court in New York. It's pretty much on track to the 30's timeline I alluded to a couple of months ago.

http://www.latimes.com/business/la-fi-b ... 1301.story

In a lawsuit filed in New York State Supreme Court late Monday, New York Atty. Gen. Eric. T. Schneiderman contends that JPMorgan should be held liable for widespread fraud related to the packaging and sale of securities backed by residential mortgages

[Reality Check]

http://www.investopedia.com/financial-e ... z287TlEyfk

Below are changes to student loan laws made by Congress in 2010 and accelerated as to effective date by executive order in 2011:

H.R. 4872 (111th): Health Care and Education Reconciliation Act of 2010
111th Congress, 2009–2010
Section 2207 -
Terminates after June 2010 unsubsidized Stafford Loans for middle-income borrowers and special allowances.
Section 2213 -
Lowers the cap on annual, income-based student loan repayments for new borrowers after July 1, 2014 from 15% to 10% of the amount by which a borrower's and the borrower's spouse's adjusted gross income exceeds 150% of the poverty line. Requires the Secretary to forgive the remaining balance of such loans after 20 (currently, 25) years of repayment.

The White House
Office of the Press Secretary
For Immediate Release
October 25, 2011
We Can't Wait: Obama Administration to Lower Student Loan Payments for Millions of Borrowers
Actions Offer Recent Graduates an Opportunity to Consolidate Loans and Reduce Interest Rates
WASHINGTON, DC – Today, the Obama Administration announced it is taking steps to increase college affordability by making it easier to manage student loan debt. The announcement is part of a series of executive actions to put Americans back to work and strengthen the economy because we can’t wait for Congressional Republicans to act.
The Administration is moving forward with a new “Pay As You Earn” proposal that will reduce monthly payments for more than one and a half million current college students and borrowers. Starting in 2014, borrowers will be able to reduce their monthly student loan payments to 10 percent of their discretionary income. But President Obama realizes that many students need relief sooner than that. The new “Pay As You Earn” proposal will allow about 1.6 million students the ability to cap their loan payments at 10 percent starting next year, and the plan will forgive the balance of their debt after 20 years of payments. Additionally, starting this January an estimated 6 million students and recent college graduates will be able to consolidate their loans and reduce their interest rates.

http://www.investopedia.com/financial-e ... z287TlEyfk

[aedens]

US Federal debt to GDP is 103%. And rising about 1.5% per month. Try to explain risk and you get a glass eyed scripted response of risk assets
back and why it is a good idea to double down investment paper to them. When this traction hits here millions are going to be much worse than before.
They are doing exactly as the defecting democrats and moderates are and have been clearly saying and reporting now.
Inventory processing then stacking in urbanized central planners wet dreams. Ask my Wifes people how that worked out.
Ask anyone from the Wall period how that went as plan B when they looted the treasury and left you for dead.
I have the honor to know a few from behind the Wall and the seal is in your mind.
Thrasymachus in Plato’s Republic, proclaimed that "justice is the advantage of the stronger"
No matter the party, the truth is to take more control for the office they hold over education, health care, safety regulation,
the economy, and many more areas of life. The power grabs of one administration are never and rarely relinquished by its successors.
If anything they all take more and that is the bottom line as we are today also.
As we noted countless times see how long they truly leave you alone with your earnings to date
and yes count the hit you took on paper last time and who as we recorded here did it. They are coming for you and even the unborn to
bury in debt which is just plain Molech evil. Below is reference that will disconnect your view from typical misnomers and the reader can
infuse a proper compass from the compiled assertions between the chapters to so called modern thought.
ISBN 978-1-55643-956-8

[aedens]

H, you posed a question from Rome on why some technology was ignored and the latter devastating bureaucratic social convulsions
that happened anyway. I would convey when a library burns it is no accident to keep darkness in mens minds since really on a
longer timeline they knew to stay in control thinking it was a bad ocupational hazzard as we read in the classics. What I mean
is to prevent a loss of control technology was put to the sword unless merged in the the pax romana treatise of cui bono.
The authors had documents better than we consider today which is resounding fact. I seen a scematic on a tomb wall that was
chemical lighting drawing but few noticed if you know what I mean.

[Higgenbotham]

A couple more articles about student loan default/delinquency rates:

http://www.businessweek.com/articles/20 ... -you-think

http://www.nytimes.com/2012/09/09/busin ... .html?_r=0

These articles discuss the fact that the New York Fed pulled credit reports in March and found that out of the student loans that are not in deferral, 27% of borrowers and 21% of balances were delinquent as of the 3rd quarter of 2011. The reason for these high percentages is about half of student loans are in deferral status.

[Higgenbotham]

H, you posed a question from Rome on why some technology was ignored and the latter devastating bureaucratic social convulsions that happened anyway. I would convey when a library burns it is no accident to keep darkness in mens minds.

Some might offer the idea that metal working wasn't advanced enough to hold the required pressures or some other technical reason, but I doubt that was the ultimate cause of the failure to advance. At certain times in history there seems to be movement in the direction of ignorance or darkness, as you say, and loss of permanence. This trend can be seen in money, record keeping, food, clothing, relationships, job tenure, how often people move, structures, or just about everything, where there is a loss of durability and a goal of just getting through the near term. That also speaks to T's observation about not preparing by getting out of the system - the mentality is to do something that works for a while.