The resumption of student-loan payments will hit American growth
It is not just borrowers who face a return to reality
People are mostly pleased by the return of normal life after covid-19. In America, though, borrowers of student loans will miss one aspect of the pandemic. Sitting on $1.6trn of debt owed to the government, they have enjoyed a break from both repayments and interest since March 2020. The holiday is now over. Interest on student loans started to accrue again this month; repayments will resume in October. Given that there are about 43m borrowers, this will drag on the American economy.
This article appeared in the Finance & economics section of the print edition under the headline “Tuition drag”
From the September 16th 2023 edition
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