Student Loan Payments Surge To Pre-Pandemic Level

From Bloomberg, "Student Loan Borrowers Paid Off Billions Before Interest Restart: Payments to the Department of Education surged to pre-pandemic levels in August, according to a new report from economists at Goldman Sachs." by Claire Ballentine and Alexandre Tanzi:

The US Department of Education saw a surge in [Student Loan] payments last month as borrowers with savings started wiping out their balances, according to a new report by Goldman Sachs. After a three-year pause, interest began accruing again on federal student loans Friday, and borrowers need to start making payments in October.

For years, borrowers held out hope that forgiveness plans from President Joe Biden would help alleviate their debt burden. But after the Supreme Court struck down the president’s program to eliminate up to $20,000 per borrower, many decided they aren’t willing to wait around while racking up more interest. About $6.4 billion was transferred from the Department of Education to the US Treasury in August, the most in any month since February 2020, according to government data.

Source: Bloomberg