A Federal Reserve study of the impact of student loan payments restarting in 2023:
Following the announcement in June 2023 that student loan payments would resume in October 2023, we find that households began to significantly curtail spending in areas with higher exposure to student debt relative to those with lower exposure. The cutback in spending grows further following the actual resumption of required payments. This finding indicates that the payment pause had supported consumption in those areas. Our results imply that the end of forbearance amounted to a noticeable drag on aggregate demand of roughly $80 billion at an annual rate. More generally, our results suggest student loan forbearance—and its removal—may have meaningful impacts on aggregate demand.
Federal Reserve says student loans are an $80 billion a year drag on the economy
byu/shermanstorch inStudentLoans
Posted by shermanstorch
5 Comments
We spent 200 billion so far on Iran in 2 weeks.
Well duh. I figured they turned the payments back on specifically because they wanted to cool down the economy because inflation was still ripping.
Honestly I’m so disillusioned with the state of the country at this point, I’m feeling pretty happy being a drag on it however small it is. I’m doing my part!
Hey, maybe if this place tried making things better for the people instead of Middle Eastern wars, untenably expensive healthcare, and culture war nonsense. Try that.
If my student loans disappeared I would go out and buy a house.
If they thought I didnt participate in the economy before they’re about to find out just how much I can not spend.