New York Magazine: Student loan debt pause to end
Lindner economics professor Michael Jones explains potential ramifications
The imminent Congressional budget deal to raise the U.S. debt ceiling included the passage of Senate bill that would end the suspension of student loan debt.
Student loan debt was first suspended in March 2020 with the passage of the CARES Act. Now, unless President Joe Biden vetoes the Senate measure, loan payments are slated to resume soon for 45 million American who have student loans, according to New York Magazine.
“There’s some concern now that, as those loan repayments restart at the end of August, you’re going to see higher delinquency rates on credit cards and other types of loans,” Michael Jones, PhD, associate professor-educator of economics at the Carl H. Lindner College of Business and academic director of the Kautz-Uible Economics Institute, told New York Magazine. “That is one of the big concerns I think economists are paying close attention to.”
According to a University of California Irvine Student Loan Law Initiative study, the debt pause saw credit scores improve by about 30 points, with loanees saving around $210 a month. However, some of those savings would have been softened by historic inflation.
Featured image at top: Courtesy of Tim Gouw on Unsplash.
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