“Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.” - Romans 13:8

The student loan payment pause will expire this October and many people are speculating that this will cause another recession.

43 million people owe student loans, and the average monthly payment is about $300. For the last three years, people in their 20’s have been putting that money back into the economy instead of paying off their student loans. Now the time has come, and the debts need to be paid.

So now that 43 million Americans will have hundreds of dollars less to spend, many are worried about another recession.

There are three reasons why I don’t think student loan repayments will cause a huge issue in our economy:

1. There is an “on ramp” for starting payments again (as long as you communicate with your borrower).
2. The SAVE program ties a minimum payment to discretionary earnings.
3. People are returning to work and working more hours.

 

I believe that paying back your debts builds character. If you owe student loans, now is a great time to put in the work and prove to yourself that you can pay it back.