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What the restart of student loan payments could mean for the economy πŸŽ“

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What the restart of student loan payments could mean for the economy πŸŽ“

Some borrowers will get squeezed, but the economy could skate by πŸ€·πŸ»β€β™‚οΈ

Sam Ro, CFA
Jun 27, 2023
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What the restart of student loan payments could mean for the economy πŸŽ“

www.tker.co
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An AI-generated image of young people upset about repaying student loans.

On March 13, 2020, in response to the COVID-19 pandemic, the government paused student loan payments and brought the interest rate on that debt to 0%.

It was an effort to provide financial relief to households during tough times while also bolstering the economy through consumer spending.

On September 1, 2023, student loan interest will reset, and payments will resume in October.

This has many worried that consumer spending, which has been remarkably resilient, could crumble. It’s a reasonable concern: Personal consumption expenditures (PCE) account for about 71% of GDP.

The impact isn’t as big as you might think 🀏

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