Student Loan ABS Expected to Continue Making the Grade

Key Highlights:

-- Delinquencies on federal student loans reached 10.2% in the second quarter of this year. However, these statistics relate to federal student loans originated under the Direct student loan program, none of which are included as underlying collateral in outstanding rated student loan securitizations.

-- Morningstar DBRS' outlook on student loan ABS remains stable because of seasonality and structural elements.

-- Since payments resumed, we are seeing increased performance deterioration in public student loans. However, we cannot determine with certainty what magnitude is related to the actual resumption of payments.

-- On the private student loan side, we expect to see an increase in volume.

"With the elimination of the federal Grad Plus and the cap on Parent Plus, we anticipate a significant uptick in volume across private student loans," said Jon Riber, SVP, Senior Sector Lead, US ABS Ratings.