Resetting Wallets: Survey Evidence on Household Budget Adjustments with Student Loan Payments Resumption

Abstract: In this fourth report of our series on the federal student loan payments resumption that began on October 1, 2023, we examine how student loan borrowers expected to change their earning, borrowing, saving, and spending behaviors and their household budgets coinciding with the return to repayment. Borrowers began considering adjustments to their household budgets after the end of the payments pause was announced in early July 2023 and continued to do so through the summer. This occurred amid several developments: changing macroeconomic and policy environments, concurrent transitions in borrowers’ personal and financial circumstances, and considerably different servicing environments and repayment plan options compared with prior to the payments pause. As a result, we would expect borrowers’ household budgets to be changing both as a result of the return to student loan repayment and because of these simultaneously occurring developments. Documenting borrowers’ expectations of these household budget changes in real time is important to understanding and interpreting subsequent borrower outcomes and their causes.

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Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Consumer Finance Institute Research Briefs and Special Reports

Publication Date: 2024-02-08

Pages: 19