Starting on September 1, interest will once again begin to accrue on the $1.78 trillion in US student loans outstanding. Starting in October, payments will begin again.
Bernstein is out with a good analysis of the numbers and highlights that about 17% of US adults hold student debt with an average of $39,000 per borrower. Those aged 35-60 have the largest balances and I suspect that cohort has little in the way of excess savings.
The way Bernstein sees it, the average is $34 per month per capita, which is just under 1% of PCE. That’s a drag but compares to $4300 per capita of spending across the US population, or $2400 when things like healthcare and insurance are stripped out.
I’m not entirely sure that’s the best way to look at it, because of the skews in the averages in the US and the higher propensity to spend every dollar coming in for people with student debt but I think it reflects the consensus. The view is that student debt repayments won’t be a big deal for the broader economy but I