A knock on effect from this is that the debt servicer is not getting the expected rate of return on that debt. Debt servicers provide loans based on the return and risk. They can use that data to make other investments, purchases etc.

A bunch of investments were made thinking that there would be $X coming in each month. Instead, $0 was being coming in each month. The difference is radical. Expected vs actual risk is -Infinite%.

So those investments are now at risk of failing. Which causes knock-on failures on other investments. On and on.

These loans will have to be forgiven anyway, it's just that by getting ahead of it now, we can avoid people losing their jobs (theoretically).

What's everyone's thoughts around this? Are there other areas where debt risk is higher than expected?

[1] https://www.msn.com/en-us/money/other/verify-how-many-people-have-federal-student-loan-debt/ar-AA1114T8