The Bank of America (BofA) warned that the resumption of student loan payments will lead to serious delinquencies for those who are facing other debts.
Student Loan Payments Will Resume
Student loan payment pause will end this August 31 and millions of borrowers are about to begin this September 1. However, the Bank of America (BofA) warned that the resumption of student loan payments will lead some households to serious delinquencies.
In a published article in the Morning Star, borrowers may end up not paying their auto-loans and credit-card debt to pay their student loans. The Bank of America released a note saying that the number of people who have not been paying their other obligations has increased.
Bank Of America Released a Note
According to a published article in CNBC, the Bank of America estimated that serious delinquencies could increase by 67% when the student loan payments will resume. BofA also added on their note that the repayments will lead some households to disregard their other debts and obligations.
Moreover, BofA explained that the number of people who missed paying their auto-loans and credit-card debt for more than 30 days has increased. People who are seriously delinquent or have been late paying their debts for more than 90 days have also increased.