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Student Loan Delinquencies Surge
Finance Megaphone
May 05, 2025
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Student Loan Delinquencies Surge as Repayments Resume, Hitting Borrowers and Credit Scores Hard
Gold Prices Near $3,300 as Investors Brace for Fed's Interest Rate Decision
Treasury Secretary Bessent Predicts U.S. 'Golden Age Economy' Amid Tariff Concerns
Student Loan Delinquencies Surge as Repayments Resume, Hitting Borrowers and Credit Scores Hard
A record 20.5% of federal student loan borrowers with active payments are now seriously delinquent—90 days or more past due—following the end of the COVID-era payment pause, according to TransUnion. This marks a sharp rise from 11.5% pre-pandemic and underscores the financial strain many Americans face as repayments resume. With around 4 million borrowers behind, many are either unable to pay, unaware payments have restarted, or choosing not to pay, leading to major credit score drops and higher borrowing costs. Those with lower credit scores are most affected, with over half of subprime borrowers delinquent. Experts warn this growing crisis could limit access to mortgages and other credit, especially amid already-high interest rates. As financial pressure mounts, many—like 29-year-old Tyler Wickord—are taking on extra jobs just to stay afloat, reigniting debates around the long-term burden and fairness of student loan debt in the U.S.
Gold Prices Near $3,300 as Investors Brace for Fed's Interest Rate Decision
Gold prices rose to $3,299 on Monday ahead of the Federal Reserve's upcoming interest rate decision, which is widely expected to keep rates unchanged. This surge follows a week of losses, but the precious metal remains near record highs, having surpassed $3,500 in April and $3,000 in March. The increase in gold's value is driven by concerns over economic slowdowns, tariff uncertainty, and strong demand, fueled by central bank purchases and a weaker U.S. dollar. Despite President Trump's criticism of the Fed, analysts predict the central bank will avoid rate cuts for now, with Deutsche Bank forecasting a potential rate cut in December. Gold continues to be seen as a "safe-haven" asset during economic uncertainty, attracting investors seeking stability amid market volatility.
Treasury Secretary Bessent Predicts U.S. 'Golden Age Economy' Amid Tariff Concerns
U.S. Treasury Secretary Scott Bessent addressed the Milken Institute Global Conference, highlighting President Trump's trade policies as part of a broader vision for a "golden age economy," driven by tax cuts, deregulation, and a stronger U.S. manufacturing base. While Bessent acknowledged the impact of tariffs, particularly on China, he offered little detail on their long-term effects, instead focusing on the potential for stronger trading relations in the future. He also raised concerns about the U.S. deficit, forecasting gradual improvements and aiming for a 3% deficit-to-GDP ratio. Despite ongoing tariff concerns and rising national debt, Bessent remained optimistic, predicting a return to noninflationary growth and emphasizing the need for fiscal discipline.
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That’s a wrap for this edition of Finance Megaphone.
We hope the insights and updates we’ve shared help you stay informed and ready to take on the market. Remember, knowledge is power, and we’re here to keep you in the know every step of the way. Be sure to check back next edition for more timely news, expert analysis, and the latest trends in the financial world.
Until then, keep investing smart and stay ahead of the curve!