We’ve seen some encouraging data recently—unemployment is incredibly low relative to history at 4.1% and actually came down last month.

Inflation has largely started to cool off, with year-over-year CPI increases down to 2.4% last month.

On top of that, the potential for lower interest rates could give the economy a much-needed boost as we move into a rate-cutting cycle.

But even with this momentum, one issue remains unresolved. The student loan crisis is about to hit a major milestone.

Starting this month, student loan delinquencies will be reported to credit agencies again, meaning we’ll finally see the impact of this debt burden on the economy.

We talked last month about rising delinquency rates across other forms of consumer debt. Credit cards, auto loans, and personal loans are all seeing more and more people fall behind on their payments.

This trend began shortly after student loan repayments resumed last September, following the pandemic-era pause.

Although official reports on student loan delinquencies haven’t shown a significant spike yet, there are other signs that trouble is on the horizon.

A key indicator comes from U.S. Treasury data, which tracks payments to the Department of Education, including Stafford Loans—federal loans that offer low-interest rates to help students pay for college.

Initially, when the forbearance period ended late last year, there was a surge in repayment activity.

Monthly payments jumped to about $7 billion, similar to pre-pandemic levels, as borrowers started catching up on what they owed.

For a brief moment, it seemed like things were stabilizing.

But that rebound didn’t last.

Payments have steadily declined over the past year, dropping to just $4 billion a month.

This sharp decrease suggests that a large number of borrowers are struggling to keep up with their obligations—likely due to financial strain as they juggle other rising costs.

Take a look…