Advocates fear it will add a financial burden that younger borrowers can’t afford.
“I’m not going out. I don’t buy Starbucks every day. I’m cooking at home,” she said. “And sometimes, I don’t even have $100 after everything.” Out of the more than 44 million federal student loan borrowers, about 7 million are below the age of 25, according to data from the Education Department. Their average loan balance is less than $14,000, lower than any other age group.
Despite the student loan moratorium, Americans mostly didn't bank their savings, according to Jefferies economist Thomas Simons. So they’ll likely have to cut back on other things — travel, restaurants — to fit resumed loan payments into their budgets. Belt-tightening could hurt an economy that relies heavily on consumer spending.
It gave her the comfort to enter a new stage of life. She got married to a recent medical school graduate, and they're expecting their first child in November. At the same time, they’re bracing for the crush of loan payments, which will cost at least $400 a month combined. They hope to pay more to avoid interest, which is prohibited for them as practicing Muslims.
The Education Department has promised to make the restart of payments as smooth as possible. In a statement, the agency said it will continue to push for Biden's debt cancellation as a way to reduce borrowers' debt load and ease the transition.
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