{"id":2020104,"date":"2023-09-02T08:12:01","date_gmt":"2023-09-02T12:12:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/student-loan-payments-are-resuming-heres-what-it-means-for-the-economy\/"},"modified":"2023-09-02T08:15:01","modified_gmt":"2023-09-02T12:15:01","slug":"student-loan-payments-are-resuming-heres-what-it-means-for-the-economy","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/student-loan-payments-are-resuming-heres-what-it-means-for-the-economy\/","title":{"rendered":"Student loan payments are restarting, impacting the economy."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fstudent-loan-payments-are-resuming-heres-what-it-means-for-the-economy%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2020104&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Interest on Student Loan Payments Resumes: What\u200c to Expect<\/h2>\n<p>After a \u2062three-year pause, interest on student loan payments started accruing again on Friday, and the first payments are set to come due next month. This\u200c change has significant implications for consumers and the economy. Let&#8217;s take a closer look.<\/p>\n<h3>The Impact on \u200dBorrowers<\/h3>\n<p>For individual borrowers, especially those already struggling to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/student-loan-payments-are-resuming-heres-what-it-means-for-the-economy\/\" title=\"Student loan payments are restarting, impacting the economy.\">make ends meet amidst inflation<\/a> and higher \u2064interest rates, \u200cthe resumption of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bidens-new-student-loan-bailout-plan-would-cost-475b-over-next-decade\/\" title=\"Biden's student loan bailout plan: 5B over next decade.\">student loan\u2064 payments<\/a> will be challenging. While experts are divided on the macroeconomic effects, Pao-Lin Tien, an economics professor at George Washington \u200bUniversity,\u200b believes that the overall consumer demand might decrease slightly.<\/p>\n<p>Goldman Sachs researchers project \u200bthat the full resumption of payments will\u200c amount to approximately $70 \u2062billion, equivalent to 0.3% of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/breaking-april-inflation-surged-to-highest-level-in-decades-as-biden-set-to-unveil-6t-budget\/\" title=\"BREAKING: April Inflation Surged To Highest Level In Decades As Biden Set To Unveil T Budget\">disposable personal income<\/a>. They also\u2063 estimate that \u2064it will reduce personal consumption expenditure growth \u200dby about 0.8% in the \u2063fourth quarter of this year. Interestingly, student loan payments have already surpassed \u2064pre-pandemic levels in recent weeks. This surge could be attributed \u2063to \u2063borrowers voluntarily restarting payments early or making large one-time payments towards their \u2063loan principal.<\/p>\n<p>While economists generally \u2062agree that the return \u2063of student loan \u2062payments will have a modest effect\u2063 on the\u200b economy and consumer spending, Sarah Foster from Bankrate \u2064expresses concern for those \u200dalready <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/friday-afternoon-update-amazon-layoffs-kinzinger-to-cnn-speaker-update\/\" title=\"Friday Afternoon Update: Amazon Layoffs, Kinzinger To CNN, Speaker Update\">facing financial hardships<\/a>. \u200bLower-income households, in particular, \u200dare feeling the impact of rising prices\u200b and higher interest rates more acutely.<\/p>\n<h3>Potential Increase in Borrowing Activity<\/h3>\n<p>There is a possibility that\u2062 the resumption of payments could lead to an overall increase in\u200c borrowing activity, not just for student loans. Consumers may need to\u2062 borrow more or <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/these-states-have-the-least-credit-card-debt\/\" title=\"These States Have the Least Credit Card Debt\">accumulate credit card debt<\/a> to sustain their spending. However, this is concerning as interest rates \u2063are now significantly higher than they were a\u2064 year \u200cago. Foster notes that\u200b loan delinquency rates,\u2063 especially among individuals aged\u200d 18 to 29, are\u2062 on the rise.<\/p>\n<p>Tien \u2064suggests that\u2062 while higher borrowing activity,\u2063 such as increased credit card debt, may \u2064occur, many people might choose to scale back their \u2064discretionary spending to \u2064avoid additional financial strain.<\/p>\n<h3>Implications \u2064for the Housing Market<\/h3>\n<p>The resumption of student loan payments could have subtle implications for the housing market. Tien explains \u2063that housing demand might slightly \u2063ease as potential homebuyers will have to allocate more\u200c funds towards\u2063 loan payments,\u2063 making it \u2064harder to afford a mortgage.<\/p>\n<p>Guardrails implemented by the Biden\u200b administration for the next year aim to mitigate the impact on the broader\u2063 economy. Late or missed payments during\u2064 this\u2064 period\u200b will not be reported to\u2062 credit \u2063agencies or considered as defaults,\u200d providing relief to borrowers.<\/p>\n<p>Overall, while the return of student loan payments will have varying effects, the administration&#8217;s efforts to \u2063ease the transition and protect borrowers from severe consequences are expected\u2062 to minimize immediate impacts on consumption.<\/p>\n<p><a href=\"https:\/\/www.washingtonexaminer.com\">Click here<\/a> to read more \u200cfrom the Washington Examiner.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>the pandemic. Now, with interest resuming and payments looming, consumers and the economy face potential impacts. After a three-year hiatus, federal student loan borrowers must prepare for upcoming payments, signaling a shift in financial obligations and potential consequences for individuals and the broader economic landscape.<\/p>\n","protected":false},"author":1,"featured_media":2020105,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2020104","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2020104","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2020104"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2020104\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2020105"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2020104"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2020104"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2020104"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}