by movalaker1
Something nobody talks about a lot in here is the looming Supreme Court decision on student loans.
The student loan pause, which was implemented as a response to the COVID-19 pandemic, has put the future of the economy at risk. If the federal government decides to forgive some of the student loan debt, it will add to the already ballooning deficit, which could lead to a financial crisis. On the other hand, if people are expected to repay the loans after the pause, many may not be able to or willing to do so, due to financial difficulties. This could result in a wave of defaults and cause a significant blow to the economy.
Furthermore, the pause has masked the true scale of the student loan crisis, and when the pause is lifted, the issue may come to a head, leading to a recession. The student loan debt crisis affects not just the individuals with the loans but also the broader economy, as it limits the spending power of a large segment of the population. This limited spending power will coincide with already diminishing savings rates and increased credit card debt.
When the pause ends after being on pause for a number of years, and since the Fed Is determined to cause more unemployment because the job market is too strong I do not see this ending well.
“Federal student loan payments won’t resume until the end of August, unless the litigation over the Biden administration’s student loan forgiveness plan is resolved sooner.” -CNBC
TL;DR: The looming Supreme Court decision on student loans could have a disastrous effect on the economy, leading to a recession.