Headline consumer credit expanded in March and was above expectations. Our analysis of the unadjusted data shows annual growth is now growing year-over-year.
Analyst Opinion of the Consumer Credit Situation
Student loan year-over-year growth rate was marginally grew but remains in an overall slowing trend.
Not only does this data set suffer from backward revision (at times moderate to significant enough to change trends -, but the use of compounding (projecting monthly change as annual change) by the Federal Reserve to determine consumer credit growth rates exaggerates the volatility in this data.
that the amount of consumer credit outstanding relative to consumer expenditures is at 21st-century highs.
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Student loan debt cancellation is within reach.
A national poll conducted in September 2020 by the Center for Responsible Lending found that nearly two-thirds of respondents supported some degree of student loan debt cancellation. A series of state-level polls found the same, with a majority of voters in Minnesota, Pennsylvania, and North Carolina supporting debt cancellation. At the federal level, over 75 members of Congress have signed on to a resolution calling for President Biden to use his executive power to cancel $50,000 in student loan debt across the board. And, in February, the Democratic Association of Attorneys General publicly endorsed the same.
Student Loan Payments: Will Joe Biden Extend the Pause?
It appears the Biden administration is considering extending the pause again, but that does not mean for certain that it will also forgive those student loans.
On his fist day in office, President Joe Biden signed an executive order extending a freeze on federal student loan repayments for eight months. The extension followed the initial freeze that was included in the Trump administration’s CARES Act passed in March 2020, which froze payments for a period of six months. Prior to Biden’s executive order, the freeze was extended again by Trump through December 2020. Biden’s extension delayed the start of repayments until at least October 2021.
Senator Elizabeth Warren called on the Biden administration to extend the current pause on federal student loan payments and interest, make it permanent, or cancel student debt.