St. Thomas Economics Professor Tyler Schipper spoke with KSTP-TV on the government's pause on student loan payments, which is set to expire on Aug. 31. Private loan rates may increase, with variability.
From the article: “There’s these private ones that have not been put on pause and some of them will vary quite a bit when the Fed changes interest rates,” said Tyler Schipper, an economist at the University of St. Thomas. “It will trickle into those rates but it may take a couple of months for it to be fully reflected in them. It will raise those variable rate loans.”
He explained the Federal Reserve likely won’t consider private student loans as a factor as it weighs whether to raise interest rates this week.
“Their argument would be that the same students that are struggling with student loan payments, they’re also the same students that are struggling to buy gas, heat their homes, buy enough food for their families and so that if there are two dragons to slay, the inflation dragon might be the one to go after right now,” said Schipper.
