Publication | BRG

Resumption of Student Loan Repayment: What Does This Mean for Retailers?

Shawn Ashworth, Murali Gokki, Joe Schmitt, Rebecca Feygenson, and Monica Volodarsky

January 24, 2024

The resumption of student loan repayments is squeezing an already stressed consumer wallet and may contribute to the further depletion of savings and an increase in consumer delinquencies.

Borrowers below median income are expected to be more impacted than borrowers above median income; however, both segments seem to value lifestyle expenses, as reflected in sustained spending on entertainment and dining out (as share of wallet), while pulling back on apparel and services.

We expect consumers to potentially pull back on spending in some categories, such as apparel and sporting goods, while looking for bargains in other essentials areas. This could positively impact demand for mass merchants and discount retailers at the expense of department stores and specialty retail.

Here are six key questions retailers should be asking themselves as they prepare for a potentially challenging 2024:

  1. What is the value proposition for customers?
  2. What product categories does the brand stand for?
  3. Is there a disciplined inventory strategy?
  4. Is the organization nimble?
  5. Is tackling margin erosion a priority?
  6. What opportunities are the organization pursuing to drive cost efficiencies?

BRG Experts

Related Professionals

Shawn Ashworth

Managing Director

Washington, DC

Murali Gokki

Managing Director

Atlanta, Midtown

Joe Schmitt

Managing Director

Los Angeles, Century City

Rebecca Feygenson


New York