Latest / Markets with Megan: A Quick Financial Markets Update / 018: College Debt Forgiveness 06-30-23
Transcript
- 0:04Megan Horneman: Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors, and we're coming to you today with Markets With Megan, we're going to talk a little bit about a Supreme Court decision that actually will impact economic growth for the rest of this year.
- 0:17Megan Horneman: Today, the Supreme Court overturned Biden's Student Loan Forgiveness Program.
- 0:23Megan Horneman: This is affecting about 40 million Americans that have student loans and the amount of student loans out there is almost $2 trillion, so this is not an insignificant amount of money.
- 0:33Megan Horneman: To put this in perspective on how much this has been saving and how much it's going to cost these student loan bars it's about.
- 0:42Megan Horneman: The average payment for student loans is about $500 a month.
- 0:45Megan Horneman: That's a big number, so they haven't had to pay this for quite some time.
- 0:49Megan Horneman: It's going to go into effect, most likely late this summer, so these young Americans and anybody with a student loan is going to have to start repaying this back $500 a month.
- 1:00Megan Horneman: That can equate to, by our math, shaving about half to 1% off of GDP.
- 1:05Megan Horneman: So this is a big deal, we think, from a consumer standpoint.
- 1:09Megan Horneman: We're seeing today in the stock market, while the equity market is rallying strongly, there's areas like apparel, luxury goods.
- 1:16Megan Horneman: These are all down on the anticipation that there's going to be less discretionary spending because of this action.
- 1:22Megan Horneman: The other thing we got today was that we saw some more softening in personal spending as well.
- 1:27Megan Horneman: There was a big surge beginning this year and now we're seeing personal spending already softening and this is before we've gotten this student loan information.
- 1:36Megan Horneman: So again, this isn't great for growth.
- 1:38Megan Horneman: We think it'll weigh on the consumer for the rest of this year and we'll weigh on GDP as well.
- 1:43Megan Horneman: We'll keep watching the developments and we'll be back with any more information that we find, but if you have any questions, feedback or comment, please feel free to reach out to us podcast at verdence dot com Thank you.