Student Loan Repayment Hits American… | Geotrendlines

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For three years, Americans with student loans have not had to make monthly payments due to the coronavirus crisis. This break This fall endsThat could spell financial shock for millions of American households, according to analysts at several banks, and therefore for big American stores like Target, Nike and Cap.

The moratorium was introduced in March 2020 for approximately 44 million Americans who owe student loans. The US government led by Joe Biden has extended the moratorium eight times, but cannot do so again because of deals to raise the debt ceiling.

$10 billion a month

This means that student loan payments will resume on August 30 for millions of Americans. And they can be significant, averaging between $200 and $299 per person per month. Nationally, that’s about $10 billion a month, according to JP Morgan’s calculations.

The resumption of payments will lead to cuts in other expenses for a significant number of borrowers, especially in the retail sector. This could particularly affect clothing, where consumers with student loans may be able to cut back on their spending.

That will affect brands like American Eagle Outfitters, Nike and Under Armour, as consumers spend less, according to analysts at Swiss bank UBS. Target, a popular retail chain among millennials with high student debt, may also notice the effects.

Cancel the loans

President Biden had a plan to cancel $10,000 to $20,000 in student loans for all low- and middle-income Americans, but that plan was ultimately rejected. The White House has proposed alternative solutions, including canceling $39 billion in debt.

The U.S. government is trying to accommodate over-indebted consumers, especially as interest rates rise and the economic outlook worsens. Consumers are expected to hold their wallets more often, pushing the US economy into recession in the medium term.

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