There’s a new, looming pressure on consumers: Student loan repayments

As if still-high grocery prices, reductions in SNAP benefits and other pressures weren’t enough, millions of shoppers will have less cash to spend in the coming weeks as the pandemic-era pause on student loan payments comes to an end.

Interest once again begins accruing Friday and, on Oct. 1, student loan payments will again be due.

Judging by recent retailer earnings reports, shoppers are already cash-strapped, with little left over for groceries and even less for discretionary purchases.

Understandably, supermarkets, mass retailers and others are bracing for the impact of student loan repayments.

Target executives, during their earnings call a few weeks ago, said the resumption of student loan payments will put additional pressure on the already strained budgets of tens of millions of households, leading it to proceed cautiously for the rest of the year.

Monthly student loan payments for undergraduate degrees average $200, with a higher number, unsurprisingly, for advanced degrees, according to a recent Raymond James analysis.

A recent survey by research firm Numerator found that almost half (48%) of consumers aged 25 to 54 carry student loan debt and 42% expect to resume making payments soon, for a total of $1.6 trillion (yes, with a “t”) in federal student loans.

While those payments were on hold, 58% of respondents said they’d been using that money to pay for everyday expenses such as groceries, rent and utilities, and 23% said they used the pause to pay down debt.

So, what will those shoppers do once their payments come due again? Well, unless they win the lottery, they will be forced to spend less.

“Impacted shoppers will cut back on core CPG spending,” Numerator said. “Shoppers with current student loans are more likely to choose national brands over store brands and to stick with brands they know.”

But this demographic has good feelings about private-label products and will likely turn to them if money is tight, the report noted.

They’ll also be looking for deals and, as this generation is a fan of e-commerce, they may be on the hunt for online discounts.

Even as grocery price inflation lifts from a year ago, ongoing pressures on consumers remain. It’s a time to focus on value and keep bottom line expectations in check.

On the bright side, though, economists don’t expect loan repayments to have a catastrophic impact on consumer spending—though those consumers might be too tired from working to do much shopping.

“The bottom line is that we do not think that the restart of student loan repayments will have a severe impact on economic growth,” a Raymond James analysis concluded. “Furthermore, as long as the labor market remains strong, there are alternatives (second job, gig economy, etc.) for individuals to complement their income and keep consumption going.”