The Morning Ledger: Student Loan Repayments Ahead. Will Spending Take a Hit?
Good morning.?As higher prices and rising interest rates weigh on consumer spending, tens of millions of student loan borrowers will as soon as Oct. 1 face repayments after a three-year pause. Finance chiefs are?watching closely to see if consumer spending takes a hit, reports Jennifer Williams-Alvarez .
The payment and interest pause that went into effect at the start of the Covid-19 pandemic put extra cash into people’s pockets, which they tended to spend rather than save. With the fall debt payments looming, however, borrowers concerned about being able to cover their student loan bills have already dialed back on certain purchases, such as coffee and clothing. Now, chief financial officers from companies including The J.M. Smucker Co. , Chipotle Mexican Grill and Macy's are eyeing the fast-approaching deadline to see how consumers react once the payments come due.
“Student loans will definitely be a change to the consumer,” Smucker Chief Financial Officer Tucker Marshall said. “It will now be a claim on their income for a given month or quarter.”
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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics ranging from corporate tax, accounting, regulation, capital markets, management and strategy.
Follow us on X @WSJCFO . The WSJ CFO Journal Team is Kristin Broughton , Mark Maurer and Jennifer Williams-Alvarez . Bureau Chief Walden Siew can be reached at [email protected] .