Student Loans: FAQs

We answer six frequently asked questions around student loans and the possible impact from the resumption of repayments.

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David Tinsley

September 2023

Key takeaways

  • Student loans form a significant part of U.S. household debt and are a key way the higher education system is funded. Loans are increasing as a share of overall student aid, with most being Federal.
  • Federal student repayments were paused over the pandemic but are now due to resume. What will be the impact on consumers? Here we answer six frequently asked questions, using the latest data as a guide.
  • According to Bank of America internal data, we find that households with income above $100K that stopped paying their student loan debt over the pandemic generally did not ramp up their spending, but instead accumulated deposits at a faster pace than the rest of the population.
  • However, it appears that the resumption of student loan repayments will be more challenging for the lowest-income groups, particularly as their spending appears to have been supported by the moratorium, and their deposit growth was slower than the rest of the population. The U.S. Administration's announced 'on-ramp' should help smooth the adjustment period.


Read our full analysis for a more in-depth look at these trends.