What Happens To The Economy When Student Loan Payments Resume?

One part of any "good" macro bear narrative for the back half of this year entails suggesting the resumption of student loan payments in the US will serve as a drag on a spending impulse that was already set to wane as pandemic buffers dwindle. While entirely plausible, it'd be foolish to overweight that consideration when assessing the prospects for a downturn in consumption, let alone economy-wide retrenchment. First, some people simply aren't going to make those payments. You can take that

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2 thoughts on “What Happens To The Economy When Student Loan Payments Resume?

  1. Sure it’s unfair, but our government is encouraging scofflaws and low types with these loans that won’t be paid back. A legitimate lender would not make these loans.

  2. US consumer spending is about $57TR annually, so I think $80BN (15 bp) of student loan payment resumption may not even be noticeable in the big picture.

    Maybe there will be more effect on retail sales ($7TR) but it may be lost amid larger factors like jobs and wages.

    In my view, forgiveness of previously incured student loans is a political issue, not an economic one. As distinguished from reducing the prospective cost of post-secondary education, which would have a (positive) economic impact.

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