US roll back of student loan forgiveness hits borrowers, economy

Much of that momentum will soon backtrack. Goldman Sachs has forecast that the Supreme Court’s decision would drive the Personal Consumer Expenditures Index (PCE) down by two-tenths of a percent. In other words, consumers will cut back their expenses, which means less cash flow to stimulate the economy.

In fact, according to a recent survey from Morgan Stanley ahead of the Supreme Court decision, 37 percent of borrowers do not think “they could make regular student loan payments without … adjusting spending in other areas,” the report said while 34 percent of respondents said they will not be able to make the payments at all.

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