After three years of payment pauses, the return of student debt obligations to the tune of $1.6 trillion will have a domino effect on other borrowing and spending practices nationwide, Goldman Sachs warned Thursday.
In keeping with the debt-limit deal struck by the White House and congressional Republicans last month, the pause on student loan payments will end no later than Aug. 30.
Goldman Sachs said that now that those loans must be paid, consumers will have less available cash and credit to buy cars, homes and daily needs, raising concerns that these debtors will face an additional monthly bill just when their household budgets are getting tighter.
This could have repercussions in the housing and big-ticket-items market, the investment firm said.
