U.S. federal student loans, which include Federal Family Education Loan Program (FFLEP) and Direct loans,  spiked to 13% according to data reported by the U.S. Department of Education last Friday;but the hike in defaults won't impact student loan ABS tied to this collateral.

The higher loan defaults come on the back of tweaks the U.S. Department of Education made to how it measure defaults, which now entails measuring borrower defaults at three years after repayment begins. The reporting method previously measured defaults at the two-year point, according to an Oct. 4, Citigroup Global Markets research report.

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