Resuming Student Loan Payments May Slow Economic Growth

The U.S. Supreme Court is expected to rule on student loan forgiveness imminently in Biden v. Nebraska and Department of Education v. Brown. On the line is the Biden administration’s plan to forgive $400 billion in student debt, impacting 40 million Americans.

However, regardless of that decision, and as a result of the recent debt ceiling negotiations, student loan debt repayments are expected to resume in October after a pause of over 3 years. The resumption of these payments, with interest accruing from September, could become a drag on the U.S. consumer, potentially slowing growth slightly in the final quarter of 2023.