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When Student Loan Payments Resume, Households Will Feel the Pinch

The resumption of required payments later this year will likely strain household budgets and reduce consumer spending, according to the firm. 

graduation students
Photographer: Robyn Beck/AFP/Getty Images

Household budgets are going to face a shock later this year when student loan payments resume, according to Jefferies. 

After a three-year pause in required payments, borrowers with federal loans will soon face monthly bills again. That presents risks similar to the effects of the 2013 fiscal cliff, when tax increases led to reduced consumer spending, Jefferies money market economist Thomas Simons wrote in a note.