Core Viewpoint - The resumption of federal student loan repayments in 2025 is expected to significantly impact consumer spending in the U.S., as borrowers will prioritize loan repayments over discretionary spending, leading to a potential decline in overall consumption in the second half of the year [1][2][8]. Group 1: Impact on Borrowers - Nearly 6 million borrowers were reported to be 90 days or more overdue or in default on their loans in the first quarter of this year, with over 2.2 million new borrowers experiencing a credit score drop of over 100 points [1][5]. - The percentage of federal student loan borrowers overdue by 90 days or more increased from 11.7% in February 2020 to 31% in April 2023, indicating a significant rise in repayment difficulties [2][5]. - Borrowers with credit scores above 620, who previously qualified for new loans, may now face challenges in obtaining auto loans, mortgages, or credit cards due to their declining credit scores [5][8]. Group 2: Demographic Disparities - The burden of student loan repayments is disproportionately affecting low- and middle-income households, particularly those earning less than $50,000 annually, who are forced to prioritize essential living expenses over discretionary spending [7][12]. - The age group of 30-49 years is experiencing the fastest increase in overdue borrowers, indicating a shift in financial stability for a demographic that previously supported consumer spending [8][12]. - The issue of student loan defaults is exacerbated by geographic and racial disparities, with higher default rates observed in economically weaker regions and among minority groups, highlighting systemic inequalities in education and income opportunities [12][15][19]. Group 3: Long-term Economic Implications - The resumption of loan repayments and the associated credit score impacts may lead to a negative cycle of reduced consumer spending, which could further weaken economic growth and stability in the U.S. [5][8][19]. - The structural inequalities in student loan burdens reflect broader societal issues, including income disparity, educational resource imbalance, and unequal opportunities among different racial and ethnic groups, potentially hindering future economic resilience [15][19].