Leaders.com
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
Loans and Borrowing

President Joe Biden's loan forgiveness program may be struck down this month (Win McNamee/Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

Full bio


Learn about our editorial policy

Jun 2, 2023

Student Loan Payments May Harm the Economy 

The pause on student loan payments will lift in September, and analysts disagree on how much of an impact it will have on the economy. 

Key Details

  • On August 24, 2022, President Joe Biden signed an executive order allowing for up to $20,000 in student-loan forgiveness, which was subsequently and repeatedly challenged in court. 
  • On Thursday, the Democrat-controlled U.S. Senate passed legislation blocking the president’s student loan forgiveness program. 
  • The Supreme Court is expected to release decisions regarding two lawsuits surrounding the issue by the end of this month—these rulings could strike down or affirm the president’s power to act on student-loan forgiveness from the executive chair unilaterally. 
  • If the program is struck down, the ongoing pause on student-loan payments will regardless lift in September. 
  • Eligible student-loan payments have been on hold since March 13, 2020, as part of the government’s pandemic-relief measures.

Why It’s Important 

While it is unclear whether President Biden’s executive order has a future, it is also unclear what the immediate effect of the law would be. Goldman Sachs analysts recently predict predicted in a research note that eliminating $400 billion in student-loan balances would have a modest impact on the economy while improving some middle-class families’ purchasing power. 

If the law is struck down, student loans will go back into effect amid an ongoing recession and housing crisis that could make the impact more severe, Yahoo Finance notes. 

“On net, the end of the student-loan-payment pause is likely to more than offset any boost to consumption from the student-loan forgiveness plan. However, in either case, the impact on spending is likely to be modest in the medium term,” says a research note from Goldman Sachs. 

The impact on the overall economy could be marginal, given that the calculated personal consumption expenditure growth would only increase by 0.1%. Still, an impact would likely be notable in September as the first waves of mandatory student loan payments impact consumer spending. Other analysts have argued that debt holders will be placed in greater financial strains due to limited savings and low savings having accumulated in the aftermath of the pandemic. 

“Ending the payment pause will put many borrowers’ financial stability at risk, and the Department of Education expects a significant increase in defaults once payments restart,” Aspen Institute Financial Security Program associate director Katherine McKay tells Yahoo Finance. 

Home / News / Student Loan Payments May Harm the Economy 
Share
FacebookTweetEmailLinkedIn

Related Stories

Wall Street Makes $100 Billion Bet on Weight Loss Pills

by PJ Howland Leaders Staff
Investing

Oct 25, 2023

Ozempic

Investor optimism around a potential blockbuster obesity drug by Structure Therapeutics led to soaring share prices across the weight-loss pharma sector.

Key Details

  • Structure Therapeutics' stock jumped 35% after reporting positive results from early clinical trials of a once-daily weight-loss pill.
  • The experimental drug helped participants lose about 5% of their body weight over one month without side effects, although there are concerns with Ozempic.
  • Analysts predict the global anti-obesity medication market could reach sales of $100 billion by 2030, up from $71 billion currently.
  • With promising growth prospects, investors are betting on companies developing new weight loss drugs like Structure, Eli Lilly, Novo Nordisk, and Pfizer.

Go deeper

FacebookTweetEmailLinkedIn

Seattle Takes The Crown For Advanced Tech Talent

by PJ Howland Leaders Staff
Tech

Oct 24, 2023

Seattle tech talent

Seattle has emerged as the metro area with the most advanced tech talent, beating out tech hubs like San Francisco and Silicon Valley.

Key Details

  • According to a new ranking by the Burning Glass Institute, Seattle has the highest proportion of advanced tech workers compared to other cities with similarly sized tech workforces.
  • The ranking evaluated 60 million high-paying, in-demand tech job postings and histories to identify cities with cutting-edge roles like AI and cybersecurity rather than legacy tech positions.
  • With tech giants Amazon and Microsoft headquartered in Seattle, the city edged out the San Francisco Bay Area, Boston, Austin, and Raleigh on the list.
  • The report found that demand for software developers and IT support specialists has declined over the past five years as companies seek more specialized tech talent.

Go deeper

FacebookTweetEmailLinkedIn

More Americans Can’t Keep Up With Car Payments

by Colin Baker Leaders Staff
Loans and Borrowing

Oct 23, 2023

car loans, used cars

A record number of Americans are behind on their car loan payments as higher interest rates and prices weigh on consumers.

Key Details

  • According to data from Fitch Ratings, 6.11% of car loans were at least 60 days delinquent in September, the highest since tracking began in the early 2000s.
  • Some interest rates on used cars can rise to as much as 21%, according to Bankrate.
  • Soaring prices and rising interest rates are squeezing consumers, making it difficult for some to keep up with their auto loans.

Go deeper

FacebookTweetEmailLinkedIn
Chevron Gas Deal
Markets

Oct 23, 2023

Chevron Makes $53 Billion Deal Amid Surging Gas Prices

by PJ Howland Leaders Staff
nike logo
Company Culture

Oct 20, 2023

Nike to Require More In-Office Days From Employees

by Colin Baker Leaders Staff
blue collar workers
Retirement

Oct 20, 2023

Explaining The ‘C+ Grade’ Retirement Ecosystem in The United States

by PJ Howland Leaders Staff

Recent Articles

Hiring

Nov 1, 2023

Learn the Winning Answers to the Most Common Phone Interview Questions

Come to your next phone interview fully prepared

Personal Growth

Oct 30, 2023

85 Quotes on Self-Love to Boost Your Self-Esteem

Don’t fall into the trap of harsh self-criticism

Company Culture

Oct 27, 2023

What is a Sabbatical? Your Ticket to Restful Growth and Meaning

Sabbaticals can benefits both employees and businesses

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2025 Leaders.com - All rights reserved.

Search Leaders.com