The canary in the coal mine? Student loan payments will begin to accrue interest starting on Sept 1,2023. The first payment will start in October but the story gets better from here. About 40 million Americans have to make payments on their student debt and that's going to cost them about $400/month on average. This works out to just under 1% of total gdp in the economy!
Why is this important? Well, that's $400 a month or the equivalent of $4,800 for the year that is not spent on things such as travelling or retail shopping. Hotels and Airbnb's will certainly feel the impact as students cut back on spending. For almost 3 years, the economy and labour market has remained resilient because of debt deferral programs and mortgage forebearance that have allowed households to delay payments. Eventually, reality has to catch up to these people and they have to pay the piper!