Earnest Analytics

Case Study: Evaluating the Impact of Student Loan Payment Resumption on Consumer Spending

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The CARES Act pause on student loan payments over the past three years is slated to expire this October. Earnest Orion transaction data can help assess the impact the resumption may have on consumer spending. Some key takeaways from this report:

  • The number of student loan payers dropped 40% in April 2020, and continued to decline further to 70% by June 2023
  • The average loan payment increased from $300/month pre-covid to $420 in 2H21, likely a reflection of a financially healthier borrower
  • Borrowers who stopped making loan payments (the Covid-Suspended cohort) originally outspent their peers in 2020, but underperformed the past two years
  • The Continuing and Non-Borrower cohorts outspent the Covid-Suspended cohort between ~1 and 5 points across most categories, especially within Air Travel, Lodging, Home Furnishing, General Electronics, and Auto Parts
  • Frontier Airlines, Airbnb, Peloton, Shipt, Old Navy, and Burlington saw a high share of spend and outspending from the Covid-Suspended cohort in 2022, leaving them more exposed to the resumption of payments this October

 Download the report for free now.