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U.S. Treasury Faces Potential August Default as Student Loan Delinquencies Rise After Biden Delay, Ahead of June 15 Tax Revenues and May OpEx

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Published May 13, 2025, 10:23 AM

The U.S. Treasury is experiencing short-term relief from student loan debt collections as the so-called "X-Date," a potential government default deadline, approaches. Treasury officials have warned that the country could face a default by August if fiscal issues are not addressed. The Biden administration delayed reporting nonperforming student loans to credit bureaus until after the recent election, but delinquency rates are expected to rise significantly in the upcoming report.

This increase in reported delinquencies reflects the growing financial pressure on borrowers. Additionally, concerns about a possible U.S. insolvency crisis are expected to intensify after the May options expiration (OpEx), especially as Treasury funds dwindle ahead of corporate tax revenues due on June 15. The government is anticipated to operate with limited cash reserves for about 30 days, coinciding with Federal Reserve Chair Jerome Powell stepping back from active intervention.

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Sources

rt.com zerohedge.com axios.com

Financelot

@FinanceLancelot

Shortly after May OpEx I bet the narrative suddenly flips to "Concerns of a U.S. insolvency crisis." Until corporate taxes come in on June 15, the Treasury vaults are empty. The government will be coasting on fumes for 30 days while Jerome Powell takes his hand off the stick. https://t.co/ydfn7OFY3I https://t.co/UC8Z2FpbBF

E.J. Antoni, Ph.D.

@RealEJAntoni

Student loan delinquency set to jump in tomorrow's report b/c these nonperforming loans have finally begun being reported to credit bureaus - Biden admin pushed this until after the election, and now we get to find out how bad things are: https://t.co/ReVHLglYxI

M. Todd Trebony, MD FAAC

@doc_singing

US could face default by August – Treasury chief — RT Business News https://t.co/EYy8PZVZcv #

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