The U.S. Supreme Court’s ruling throwing out President Joe Biden’s student loan relief plan will likely further dent consumer spending at a time when the main engine of the economy is already stalling.
The decision to overturn the forgiveness program, which would have canceled as much as $20,000 in student debt for certain federal borrowers, won’t have a major impact at the macroeconomic level by itself, according to economists. But it will add to the financial strain households are increasingly facing this year.
“For impacted borrowers, this is indeed a setback that will limit their capacity to spend, and at the margin could add to the headwinds confronting consumer spending,” said Tim Quinlan, a senior economist at Wells Fargo.
