*UPDATE*: Student loan pause extended again to 12/31.
Up to $10K student loan/$20K Pell Grant will be canceled.
43M borrowers will benefit, including 20M with debt reduced to $0.
~ the post below was written before the 8/24 announcement ~
š©āš Back to School, Back to Student Loan Payment
US student loan payments to resume in 1 week.
How much $ from this cash outlay? ā¬ļø
š„ A Big Pile of Debt
As of Q2 ā22, a student loan has grown to $1.6 trillion in the US.
Higher than car loans $1.5 trillion and credit cards $0.9 trillion.
š¦ The Pause of Repayments
Since Mar ā20, the US government has paused student loan payments.
The pause has been extended several times by both Trump and Biden administrations.
š© Impact on Credit Score
The forbearances for student loans and other credit products, have suppressed consumer delinquencies and boosted credit scores.
New York Fed study: the score lift effect is more pronounced for student loan holders.
šØ Resumed Cash Outlay
The Roosevelt Institute: on average each borrower needs to pay $Ģ³3Ģ³9Ģ³3Ģ³ per month.
The total payments on student loans will be $Ģ³8Ģ³5Ģ³ Ģ³bĢ³iĢ³lĢ³lĢ³iĢ³oĢ³nĢ³ a year.
The cash outlay is expected to lower the overall credit score.
Consumer delinquency will continue to normalize.
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