Broker Check
The US Government's Biggest Financial Asset - Student Loan Debt

The US Government's Biggest Financial Asset - Student Loan Debt

June 23, 2020

We tend to hear lots of things about government debt, but why don't we ever hear about government assets?


Student loans make up the biggest financial asset held by the federal government, and by an enormous margin. The rapid growth in student loan debt in the past decade has become an ongoing topic with the financial press.


The value of government backed student loans has increased by over 1000% since the last great recession, and now sits at over $1.5 trillion in government assets. The federal government effectively monopolized student loans in a provision of the Affordable Care Act, signed into law in 2010. Since then, privately originated student loans have been slowly falling as government backed loans increased.


In 2018, the U.S Treasury Department announced in its yearly report that student loans account for over 36% of all government assets, becoming the largest slice of Government Financial assets by a massive amount.


Student loan debt is a phenomenon that we will want to continue watching in the upcoming years, especially when more information regarding private loan markets becomes available. One thing is for sure; Student loans will continue to be with us for years to come.


While private lenders have declined how the amount of loans they originate, they are coming back into play for refinancing higher interest government loans.