C&B Notes

Lender of First Resort

Last April we noted just how large a percentage of student loans are now, for all intents and purposes, nonperforming.  This Fed chart caught our eye, as it shows how much consumer credit the federal government now owns directly and how quickly this “portfolio” has expanded in recent years – the vast majority of which is tied to student loan origination.  Large losses are looming in this now more than $1 trillion pocket, and they will only be forestalled by extend-and-pretend programs supported by politicians.


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