Average Student Loan Borrower Makes $65,000 and Is an ‘Impulsive Shopper’ — How Do You Compare?

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The U.S. Supreme Court is expected to make a ruling soon on the legality of President Joe Biden’s federal student loan forgiveness plan, which has been tied up in the courts almost since it was announced in August 2022. No matter how the court rules, millions of borrowers will have to resume loan payments before the end of this summer after a pause of more than three years.

When payments do resume, many borrowers will have to drastically change their spending habits – and apparel brands could pay the price.

The end of the payment pause is expected to lead to a slowdown in consumer spending, according to a new analyst report from UBS. Spending on apparel could take an especially big hit. The UBS report was partly based on an online survey of about 8,500 adult consumers — nearly 1,400 of whom have student debt. Among the survey’s key findings, according to Business Insider:

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Given these tendencies, you can expect to see a major slowdown in apparel spending by student loan borrowers when payments resume. Brands and retailers that could be most impacted include American Eagle Outfitters, Carter’s, Crocs, Foot Locker, Canada Goose, Gap, Nordstrom, Nike, Steve Madden, Under Armour and Victoria’s Secret.

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That impact would be softened if the SCOTUS rules in favor of the Biden forgiveness plan – an unlikely scenario, given the court’s 6-3 conservative majority. If the forgiveness plan is upheld, some borrowers would qualify for up to $20,000 in canceled debt. Here’s where they’re most likely to put the money they save, according to a recent Federal Reserve survey:

  1. Save for other things (outside of a home purchase): 26% of surveyed borrowers.
  2. Save for a home purchase: 10%. This category differed depending on the age group, with 19% of borrowers ages 18 to 29 saying they would save for a home purchase and only 4% of those age 45 and older saying they would save for a home purchase.
  3. Spend it on other things: 7% of surveyed borrowers.

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