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With student loan payments set to resume on October 1, American companies are breathlessly awaiting how borrowers might cut back on spending as they face their first loan bills in over three years. Previous CivicScience reporting looked into which brands might be most impacted by student loan payments resuming, overall concern levels, and which major life plans borrowers might delay.
As the deadline looms – and interest has begun to accumulate once again – CivicScience will regularly track consumer response to student loan resumption. Whether it’s examining where American borrowers are cutting back or how student loans might impact the holiday shopping season, we’ll provide a wide view of how these shifts might affect consumer markets.
CivicScience took a deeper look at which shopping categories borrowers are most likely to reduce their spending on. When it comes to entertainment, travel, and non-essential food purchases, dining out tops the list of areas where student loan borrowers might cut back (36% anticipate reducing their spending on eating out). But clothing, much more of an essential purchase, comes in second at 34%. Entertainment (33%), travel (32%), household items (31%), and groceries (29%) follow close behind. Over one-quarter of borrowers cutting back on food is consistent with previous CivicScience reporting about how that industry might be disproportionately impacted by student loan repayment.
Meanwhile, gas, personal care items, and streaming services are currently among the categories consumers are least likely to cut back on (between 16% and 21%). Perhaps they’re considered essentials in their own way, or are just harder for some consumers to whittle down than travel or dining out.
CivicScience has long tracked borrower concern over the summer, leading up to payment resumption in October. Although concern levels spiked following the Supreme Court decision to strike down President Biden’s loan forgiveness plan, they have lately stabilized with around 4-in-10 borrowers ‘not at all concerned’ about repayment. That said, borrowers ‘very concerned’ about loan repayment have increased by three percentage points since this time in August (up to 30%).
Three more student loan insights to know this week:
- Thirty-eight percent of Gen Z borrowers plan to reduce their spending on entertainment and dining out, slightly exceeding the levels of all borrowers.
- Meanwhile, borrowers aged 25-34 are more likely than all borrowers to cut back on entertainment and food delivery – but they’re less likely to reduce their spending on gas and streaming services.
- Just over one-quarter of Sweetgreen customers with student loan debt are ‘very concerned’ about paying it back – and nearly three-quarters are at least ‘somewhat concerned.’
Curious to know how the resumption of student loan payments will affect your business? Book a meeting today to stay ahead of the coming months.