California
18% of California student loans are delinquent

Despite the financial stress of Golden State life, Californians are relatively good at paying bills compared with the rest of the nation.
Take student loans. In the first quarter of 2025, 18% of California student loans were late.
That may seem like a stunningly high rate of skipped payments, but it’s the 10th lowest delinquency rate among the states and the District of Columbia. And across the nation, 23% of student loans were delinquent.
That’s what was found by my trusty spreadsheet’s review of bill-payment data from the Federal Reserve Bank of New York. The research, from 2003 to the first quarter of 2025, examines debt levels and payments drawn from individuals with credit histories.
The latest report was the first since student-loan repayment reprieves ended. That means late payments on many educational loans were once again being reported to credit bureaus. This provides a window into the scope of this education-linked financial challenge.
Student loans are roughly 5% of all California debts. These borrowings equal $4,660 per capita of the $87,620 total consumer borrowings statewide.
Nationally, it’s a bigger hurdle: student loans run $5,470 per capita – or 9% of Americans’ $62,490 per capita debts.
The ability to pay varies wildly. Mississippi was the worst at student-loan repayment, with 45% of these debts in arrears, followed by Alabama, Wisconsin, Kentucky, and Oklahoma, all at 34%.
The best at making payments lived in Illinois and Massachusetts, with 14% delinquency, followed by Connecticut, Virginia and New Hampshire were next at 15%.
Bigger picture
To start 2025, only 1.9% of all California consumer debts were 90 days or more past due.
Yes, skipped bills increased from 1.6% at year-end 2024. And it’s California’s highest level of tardy bills since the second quarter of 2020, when coronavirus lockdowns severely impacted the economy.
However, this level of delinquency is significantly lower than the 3.6% average lateness since 2003.
Nationally, 2.9% of bills were late in the first quarter, up from 1.9% at year’s end. Like California, the rate is still historically low. American tardiness has averaged 3.8% during the last 22 years.
California’s economy also has its challenges. Job creation has slowed to a crawl. The state remains unaffordable for the masses. The Trump administration’s “America First” thinking collides with California’s globally oriented business climate. Consumer confidence is also down.
That monetary angst can be found in the slowdown in Californians taking on new debts.
In the first quarter, total borrowings increased at an annual rate of only 0.8%. That’s well below the 3.3% growth pace since 2003.
It’s a similar picture across the nation. Borrowings are up 1% in a year vs. a 3.3% average growth.
Home sweet home
The New York Fed tells us Californians are getting better with home loans, which are 81% of all consumer debts statewide.
Just 0.56% of mortgage balances were 90 days or more late to start 2025. That’s down from 0.58% at year’s end. Although we’ll note that the late mortgage level in the fourth quarter of 2024 was the highest since the second quarter of 2020.
And lateness is historically low – below the average 2.8% late home loans since 2003.
Equally noteworthy is that California’s improvement rate comes as more Americans fail to make timely payments on mortgages, which are 70% of all U.S. consumer debts.
In the first quarter, 0.9% of U.S. home loans were late – the worst payment pace in five years. That’s up from 0.6% at year’s end, but this is still comfortably below the 2.6% historical norm.
There is a rising level of deeply troubled homeowners.
California had 15 new foreclosures per 1,000 consumers in the first quarter. That’s the highest since the first quarter of 2020 and up from 12 at year’s end. But to be fair, it’s also nowhere near the 88 per 1,000 average since 2003.
Same story nationally with 21 U.S. foreclosure starts per 1,000 consumers – up from 14 at year’s end but off the 70 historic pace.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

California
California’s High-Speed Rail Deserves to Be Canceled | Mint

(Bloomberg Opinion) — If President Donald Trump follows through on his recent threats to cut off federal funding for California’s long-troubled high-speed rail project, it would be better for all concerned: For all intents and purposes, this thing went off the rails (sorry) a long time ago.
Escalating costs have made it clear that no money was or ever would be available to realize the vision of a modern bullet train between Los Angeles and San Francisco. What’s under construction is a segment through California’s Central Valley, where costs are cheap compared to other parts of the system but which offers almost no economic value. The whole thing has become a zombie project that nobody with clout in state politics can either rescue or kill. A hated outsider officially ending it would let the state’s Democrats complain while also allowing them to acknowledge the reality that it’s not going to happen.
The tragedy is that the basic concept of high-speed rail for California makes a lot of sense.
Los Angeles and San Francisco are two large metropolitan areas that are about as far apart as Rome and Milan (about 380 miles). Trains between those two Italian cities have a 68% market share relative to airplanes, and the competition puts downward pressure on airfares. At this kind of distance, many passengers prefer the comfort of a train to the speed of a plane, and the convenience of train stations to airports. A train could also provide frequent service to intermediary locations such as Bakersfield, Modesto and Fresno — cities that in the aggregate have a large population, but by themselves aren’t large enough to support a lot of flights to LAX or SFO. And finally, once the core HSR line was built, spurs to San Jose and Sacramento, and an extension to San Diego, would be relatively straightforward.
These are all real benefits. But they depend on connecting Los Angeles and San Francisco with a train that is both fast and cost-effective to build.
The failure to achieve this has become a legendary case study in progressive excess, but the original sin was committed by a Republican — Michael Antonovich, then a member of the LA County Board of Supervisors — in 1999. Planners wanted the train to head north from Los Angeles along the route of Interstate 5, but Antonovich successfully pushed to detour the train through his district. That made the project more expensive and increased travel time.
Unfortunately, this set the template for almost every subsequent decision around the project. To build a fast train between Los Angeles and San Francisco in a cost-effective way, it is important to prioritize making the train go quickly between Los Angeles and San Francisco. There may be tradeoffs between expense and speed. But it should never cost more to make the train slower. Yet it happened again with another major decision to get from the Central Valley to San Francisco via the Pacheco Pass rather than the more northerly Altamont Pass.
There are many more details, complexities and decisions that went into this fiasco, but the basic story is pretty simple: They couldn’t build a cost-effective fast train between Los Angeles and San Franciso because they kept making choices that deprioritized that goal. It is of course understandable that elected officials who represent places other than LA or San Francisco would have other priorities. But regularly deferring to the wishes of those who weren’t aligned with the core goal of the project undermined it.
The way to do these things is to avoid precommitments. California should have invested a modest amount of money for a cost-effective proposal, and then asked the legislature to support it. If it said yes, great. If it said no, fine. Either way, you wouldn’t end up with a bottomless money pit — and no train.
A new high-speed rail proposal for the East Coast, from the Transit Costs Project at New York University, shows what sound planning looks like. Rather than copying Amtrak’s official proposal — which starts by asking every stakeholder what they want, then rolls it into an impossible $117 billion plan — the NYU study looks for the cheapest way to send trains from Washington to Boston in just under four hours. Its plan involves modest amounts of new construction and significant changes to commuter rail operations. But the whole thing comes in at about $17 billion, which is a very modest cost for a program with large benefits given New York’s constrained airspace, and leaves most train commuters better off.
Yes, some existing riders would lose out, as would some Amtrak customers in less populated cities. The politics of making this plan a reality aren’t simple. But the upside — especially to “in between” cities such as Baltimore, Providence and Philadelphia — would be huge. It’s an idea creative politicians should take up.
More important, politicians throughout the country should pay attention to the enormous price gap between the “do it as cheaply as possible” plan and the “accommodate as many as possible” plan, because the basic point is applicable to all kinds of infrastructure projects in all kinds of places: If something is worth doing, it needs to be made a priority. If it’s not important enough to be prioritized over other considerations, better to give up and do something else instead. Otherwise, like California’s politicians, they may be left with not much more than a lot of wasted time and money.
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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Matthew Yglesias is a columnist for Bloomberg Opinion. A co-founder of and former columnist for Vox, he writes the Slow Boring blog and newsletter. He is author of “One Billion Americans.”
More stories like this are available on bloomberg.com/opinion
California
Protesters flood downtown L.A. amid nationwide demonstrations against Trump’s policies

‘Fighting for those who can’t fight’: Protesters side with migrants in downtown L.A.
As thousands of people flocked to downtown L.A. to protest President Trump, many marchers said they were inspired to come out on behalf of immigrants.
“We’re fighting for those who can’t fight for themselves, the undocumented people of color, all those who put their heart and soul into making this city — this country — what it is,” said Barbara Guterac, 56.
L.A.’s “No Kings” protest , which seeks to challenge President Trump’s executive overreach, was planned before the immigration raids that gripped Los Angeles over the last week.
While immigration was a major theme at Saturday’s march, protest signs targeted a wide range of issues, including abortion and LGBTQ rights. Other signs compared Trump to a dictator.
Guterac, who lives in Orange County, said she knew of many people who wanted to come to Saturday’s march, but were instead hiding at home, terrified of getting detained by immigration agents.
“They don’t know if they’re gonna be snatched up on the street, snatched up at a traffic light, or at work,” she said.
She said she’d encouraged the undocumented people in her life to stay home from Saturday’s event. She even told her brother, a U.S. citizen, to stay home because she worried his tattoos could make him a target.
Veronica Guzman, 63, said she had come out for the children of undocumented immigrants.
“They have to go to school, fearing their parents cannot go to work,” she said. “Are they going to have a roof over their head? Are they going to have food on their table? What child can concentrate at school?”
She said she knew people who had voted for Donald Trump.
Now, she said, some were out with her at Saturday’s protest.
Anji Gaspar-Milanovic, 51, the child of immigrants, said she’d been disgusted at how the recent immigration raids had been carried out.
“It breaks your heart,” said Gaspar-Milanovic, who said she’d watched footage circulating yesterday of a U.S. citizen interrogated by agents. The man, who is Latino, said agents took his ID. “The way this is being carried out is inhumane and cruel.”
California
Democrats resisted some of Gavin Newsom’s budget cuts, but left tough choices for later

By Alexei Koseff, CalMatters
This story was originally published by CalMatters. Sign up for their newsletters.
The California Legislature passed a state budget today that relies more on borrowing than spending cuts to close a projected $12 billion deficit, aiming to push off difficult decisions about priorities even as that gap is only expected to grow in future years.
The $325 billion legislative spending plan, which was approved by the Democratic majority along largely partisan lines, is something of a formality, because lawmakers are constitutionally required to pass a balanced budget by June 15 or forgo their pay.
Having rejected many of the cuts to social services that Gov. Gavin Newsom proposed last month to stabilize California’s finances long-term, they must now negotiate a compromise in the coming weeks, with the July 1 start of the fiscal year looming.
The two sides remain billions of dollars apart, particularly on Medi-Cal, the state’s health insurance program for the poor, as well as home health services, public transit, higher education and raises for state workers.
Democratic leaders said they want to delay painful cuts by a few years to give themselves more time to find another solution that doesn’t “balance the budget on the backs of the most vulnerable” — and perhaps, as one lawmaker put it this week, wait for a “miracle” turnaround in California’s economy.
“The worst outcome here, though, would be to make cuts that we ultimately realize we didn’t need to make — to throw people off safety net programs and then come back and realize, you know what, the projections were off, that wasn’t something that was necessary,” Assemblyman Jesse Gabriel, the Encino Democrat who chairs the Assembly budget committee, told reporters after the vote. “We could be in a totally different world six months from now.”
A major point of contention is Medi-Cal, which is driving a large portion of the deficit. The state expanded services significantly in recent years and costs are now rising faster than anticipated after more new patients enrolled than projected. Lawmakers allocated billions of dollars in additional funding to the program this spring to keep it solvent.
Newsom proposed major changes to address those structural issues, including freezing enrollment for adults living in the country illegally, who became newly eligible last year, as well as adding a $100 monthly premium and cutting long-term care and dental benefits for those who maintain their coverage. The governor also wants to eliminate coverage for weight loss drugs like Ozempic and reinstate a strict asset test for seniors, which was recently eliminated.
The Legislature has accepted some of those proposals, such as the enrollment freeze and stopping coverage of weight loss drugs, and scaled back others, including the asset test. Lawmakers want to lower the monthly premium for undocumented immigrants to $30, give those who lose their Medi-Cal coverage because they cannot pay it a chance to re-enroll, delay cutting their dental benefits and maintain their long-term care benefits.
Even that potential compromise has been anathema to some Democrats, who spoke out against what they deemed a “two-tiered health care system” during the floor debate, urging a no vote or asking the Legislature to instead consider raising taxes on billionaires.
“We cannot contribute to the fear and suffering of communities across our state, and I implore us to consider alternatives,” said Assemblymember Celeste Rodriguez, an Arleta Democrat, who was nearly in tears as she told her colleagues that she was offended by the budget bill.
The legislative plan also rejects a Newsom proposal to cap overtime hours for in-home supportive service providers and eliminate those benefits for adults living in the country illegally.
It restores funding the governor had sought to eliminate for family planning clinics; the University of California, California State University and student financial aid; and public transit. It moves forward with $767 million in raises for state employees that Newsom asked to pause and introduces funding for other legislative priorities, including more than $900 million for affordable housing construction and mortgage assistance for first-time homebuyers. It proposes lending up to $1.75 billion from the state for local governments in Los Angeles and San Francisco Bay Area transit agencies dealing with their own budget crunches.
All of that would add billions of dollars in spending, next year and ongoing, above Newsom’s plan — which already relies on shifting money meant to pay for climate projects and Medi-Cal provider reimbursements, and pulling $7.1 billion out of a rainy-day reserve fund to close the revenue gap. To pay for it, the Legislature seeks to borrow even more from state special funds.
Their approach could be difficult to maintain given the state’s grim fiscal outlook, with an annual budget shortfall projected to grow to $30 billion within the next three years. Turmoil in the stock market and key California industries caused by Trump’s sweeping new tariffs, as well as anticipated federal funding cuts, could deepen that hole.
“This budget was really passed on a hope,” state Sen. Roger Niello, a Roseville Republican who serves as vice chair of the Senate budget committee, told reporters. “A budget that is passed on hope is a budget that is destined for trouble.”
Out of touch with Californians on spending?
And it increasingly does not reflect the will of California voters.
The Public Policy Institute of California has been surveying residents since 2003 on whether they prefer having higher taxes and a state government that provides more services or lower taxes and a state government that provides fewer services.
While Californians narrowly expressed a preference for higher taxes and more services for more than 20 years, that has recently flipped. PPIC’s latest survey released this week found that 55% of Californians now would rather have lower taxes and fewer services — although that is only true of about a third of Democrats.
The survey also found that 56% of California adults think it’s a bad idea to dip into the rainy-day fund to help balance the budget, even as an equal number support some combination of spending cuts, revenue increases and borrowing. And 58% now oppose providing health care coverage for undocumented immigrants, a complete reversal from when the question was last asked two years ago.
Mark Baldassare, director of the PPIC survey, told CalMatters the shifting political landscape tracks with an increasing number of respondents in recent years who believe the state is headed in the wrong direction and that there are bad economic times ahead.
“There’s so much pessimism about what the year ahead might look like, both in California and the nation, that there’s really a desire to shrink down the size of government and expectations that we had previously,” he said. “Voters are just not convinced that we’re not going to be in times where we can afford all the things that we want from government.”
State Sen. Scott Wiener, a San Francisco Democrat who chairs the Senate budget committee, dismissed the results of one poll. He contends that most Californians, asked if they want to cut specific programs such as funding for community health clinics or kick people off their health care, would say no.
“Yes, Californians want to have government that is run well and efficiently. I want that, too,” Wiener told reporters following the budget vote. “But Californians have shown over and over again that they care deeply about making sure that we have these basic services.”
A few Democrats agreed during the floor debate today that California needed to “right-size” its spending, especially with heavy cuts to federal funding likely coming later this year.
But most defended their plan as striking the right balance between fiscal responsibility and upholding California’s values, generating intense criticism from Republicans.
“Let’s be practical. We can’t be all things to all people, but we can be responsible to the critical issues that make California a great state,” said Assemblymember Diane Dixon, a Newport Beach Republican, who cited wildfire management and home health services as priorities that the Legislature should focus on funding. “We can’t be perfect, which means we can’t do everything.”
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
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