"The end of the moratorium is going to be a shock to a significant number of household budgets," writes Jefferies economist Thomas Simons. "Households have already been eating into their excess savings to maintain their preferred consumption in the face of high inflation."
"That would reduce the hit to growth this year, but probably push it back towards next year, depending on how much they're able to really stretch out this transitional relief," Yaros said.that the administration would create a "ramp repayment program" to help borrowers resume paying their loans in the fall.
Yaros characterized the shift as a "normalization" to pre-pandemic levels. Laura Beamer, a researcher with the Jain Family Institute, has found that the pandemic was the first time ever in which the highest student debt obligations decreased, rather than increased, over time. So a return to the pre-pandemic economic status quo, she said, would be "not a rosy picture at all" for borrowers.
"Working Americans who didn't get the opportunity to finish their degree and don't benefit from generational wealth deserve relief. Student debt relief is a racial and economic justice issue," said Rep. Jamaal Bowman. "The burden that student debt places on families is immense and unforgiving."
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