U.S. Student Loan ABS 2023 Outlook

Over the past year, the U.S. student loan asset-backed securities (SLABS) market has faced a challenging environment and has been affected by macroeconomic difficulties and uncertainty related to issues occurring within the federal student loan program. As a result, U.S. SLABS issuance volume declined sharply in 2022. We expect the obstacles that affected the SLABS market in 2022 to continue into 2023, with a resolution related to the Biden administration’s student loan forgiveness plan to occur sometime in the first half of the year. We expect student loan borrowers to generally remain under financial pressure in 2023 amid persistent inflation, high interest rates, and a softer labor market.