Investor Presentaiton
5 Resumption of Student Loan Payments
Resumption of student loan payments in October is estimated to deduct ~50bps
from Q4 GDP growth and will pose further headwinds to consumer spending
Student Loan Repayments Estimated Impact | Goldman Sachs Research:
Billions of dollars (annualized)
100
90
80
70
60
Billions of dollars (annualized)
100
90
80
70
60
50
40
Student loan payments
30
Pre-pandemic trend
20
All borrowers restart payments
10
0
-70% of borrowers restart payments, 15% restart over 12 months
70% of borrowers restart and enroll in IBR
50
40
30
20
10
2 8 9 8 2 2 0
2017
2018
2019
2020
2021
2022
2023
2024
"We expect the resumption of student loan payments—which officially starts in October—to subtract 0.5pp from quarterly
annualized GDP growth in Q4. The resumption of payments in full would be equal to roughly $70bn, or around 0.3% of disposable
personal income. Assuming that two-thirds of this hit comes out of spending and the impact builds over a few months, the impact
on quarterly annualized consumption growth is -0.8pp."
- Goldman Sachs Research, September 12, 2023
Source: Goldman Sachs Research, "The Q4 Pothole: Student Loans, Shutdown, and Strikes (Walker/Phillips)", September 12, 2023
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