Retailers Are Nervous About Your Student Loans

In a couple of weeks, US consumers will be required to start making payments on some $1.6 trillion of student loan debt after a three-year moratorium. Economists estimate the repayments could curb consumer spending by anywhere from $9 billion a month to $70 billion a year. And that’s before accounting for the recent uptick in gasoline prices, which are now at their highest since October and closing in on $4 a gallon. Retailers must be pretty concerned about how this will effect shoppers, right? Well, yes and no. Ask three different retailers and you’re likely to get three different answers, underscoring how there is little consensus among even those closest to consumers on how all this will play out.

The stakes are high. The surprisingly resilient American consumer is the primary reason why economists have pushed back or even eliminated their forecasts for a recession. The level of concern among retail executives over the resumption of student loan payments run the gamut from brushing it off as a non-event to bracing for a big pullback in spending. Even the country’s largest retailer by sales volume, Walmart Inc., is uncertain how this will impact the consumer. Chief Financial Officer John Rainey told investors in August the company has “a pretty good look at what's going on with the consumer but it's far from clear is basically the message right now.”