Navient Corp, the largest student loan servicing company in the US, gave a glimpse into worsening trends in the $1.2tn market as it reported a 40 per cent drop in profits due to a big rise in provisions and a squeeze on interest margins.
Student loans have been the only consumer debt segment to grow in the US since the Lehman crisis, with the total outstanding more than doubling since 2008. At the same time, fears have risen that the jobs market is not strong enough to support such towering amounts of debt.