14 mar Williams: Well, I think really COVID exposed the credit crisis that we have within debt
Most: Can you talk about the social impact of this debt? Is one of the big incentives, perhaps, for the Biden administration that they believe that forgiving this debt will pay off in the long haul? That it will allow them to take that money and put it elsewhere into the economy? Is that the hope and the incentive here?
When we think about student debt, it's now the largest category, with the exception of mortgages. So I think the thought is, look, the average debtor, with student debt, they're paying roughly $400 a month, so roughly $4,800 a year. That money itself could go towards other things.
For example, maybe towards rent, maybe towards starting a new business, maybe towards a mortgage. Leading into COVID, we saw roughly 25 percent of borrowers were either late in payment or actually were delinquent in payment. So it's a significant issue personal loan companies in Hawaii and it impacts FICO scores for students and their ability to get credit in the future.
So there's a lot riding on this. I think financial health is a big issue, as well as sort of we're learning more studies about mental health related to the financial consequences of having this burden, which can average 20 to 25 years for many of these student borrowers.
Most: Can you talk briefly about how the current COVID-19 student loan pause may have affected borrowers and how it's sort of impacting their behavior?
Williams: Right. The pause itself was first started in . And that pause has been actually hit five additional times.