In less than two weeks, consumers across the country will have to start making student loan payments again — something they have not had to do in more than three years. The impact of that event is causing concern across the board — consumers are concerned whether they will be able to afford the payments, and retailers are concerned whether consumers will cut back on their spending because they don’t have as much disposable income as they did before. While economists appear to be cautiously optimistic about the impact that the restart will have on consumers, it is clear that many of them are more closely inspecting their budgets to make sure they can get by. Will payments on old debts make the cut? That is a question many in the accounts receivable management industry will have to wait to find out.
According to one survey, 90% of consumers with student loans expressed some level of concern about payments resuming, especially if they owed more than $100,000. Consumers said the areas where they are most likely to feel the negative impact of resuming their student loan payments are saving money, overall financial stability, and paying monthly bills.
Meanwhile, a report in today’s Wall Street Journal notes how one family is looking at cutting back on its daily cup of coffee and asking to work from home one additional day a week to save gas as a means of covering the monthly payments on their student loans.
One economist said that the amount of money saved while student loan payments were paused works out to between 0.4% and 0.6% of all consumer spending, and taking that money out “would have a barely noticeable effect on the economy.” While that may be true, at least in the short term until they get a handle on their finances after making student loan payments again, it is clear that many will be more closely scrutinizing their monthly expenses and anything considered to be unnecessary or frivolous is likely to get cut.