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bigheadpercoli

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~18.8% is roughly 20% or every fifth student loan in the country. If 20% of your portfolio can't repay it's debt that's usually a bad portfolio.

In a simplified model : Assume you give 100 dollar to five people with the intent to earn 5 dollar on interest of each (total 25 dollar interest income.) If now one of them can't pay back the 100 dollar you lose the 100 dollar and the five dollar interest income. So instead of 25 dollar income you get (20-100-5 = -85 dollar). To avoid this situation you start calling the guy (collections activities). Effecting your earnings again.

Of course one months in arrears is not immediately the road to immediate doom, but it is an early warning indicator. Especially if you look into trends to understand the behavior of the portfolio.

In this case the early-stage delinquencies have been improving since 2014 and starting 2017 reversed that trend. So if the trend continues this portfolio segment will grow again leading to more losses and collection activities.

Don't understand why this is down-voted because it brings up a valid point.

The Financial Services sector is heavily regulated because of the importance of trust and correct information. You can bring the system to an immediate standstill since most of the automation in the sector relies heavily on credit bureau data.

I believe Amazon, Tesco, etc actually would hold now the most accurate information about customer repayment ability in the retail segment.

I'd say re-production and re-cognition are two separate skills.

I recognize the Mona Lisa when I see it, but I won't be able to reproduce it.

Disrupting Uber 10 years ago

Wouldn't it be more than competition since the market would not exist in the first place?