44 million Americans with student debt are bracing for a ‘payment shock.’ Many of them are filled with regret

Federal student loan payments for nearly 44 million people resume in just a few days, and Americans are feeling the strain. From putting less in their 401(k)s to buying fewer luxuries and essentials alike, many of them expect the returning monthly bills to significantly alter how they spend their money and how financially comfortable they feel day to day.

That’s what multiple recent surveys have revealed in the lead up to the three-and-a-half-year payment pause ending. Around 75% of borrowers plan to cut back on their spending, according to the MassMutual Consumer Spending & Saving Index. The same percentage say they will have trouble saving for retirement once their student loans resume, per a new survey from Corebridge Financial and Morning Consult published Monday, an unfortunate reversal of the savings trends of the past three years.

It’s perhaps no surprise, then, that 24% of Americans with student loan debt say it’s their biggest financial regret, according to a survey from personal finance site Bankrate. At the same time, Bankrate finds stress has been rising for 57% of borrowers over the past year, as the first due date since early 2020 draws nearer.

The results are in line with other surveys that show some borrowers will struggle to pay their bills. Analysts and other experts have been warning of the “student loan cliff” for months, saying there is likely to be a drop off in consumer spending once the monthly bills are back. Household budgets already stretched thin by inflation and the highest interest rates in decades may struggle to incorporate the multi-hundred dollar monthly bill.

Consumer spending in the U.S. could fall by as much as $9 billion each month, according to a July report by Oxford Economics. Gross domestic product growth could fall by 0.1% in 2023 and 0.3% in 2024, increasing the probability of a recession.

“Of course, the more money people put toward their student loans, the less they’re likely to have left over for other purchases,” Jacob Channel, senior economist at LendingTree, previously told Fortune. “Once payments are back in full effect, we’ll probably see this more clearly on a macroeconomic level, and I don’t think anyone should be surprised if consumer spending drops over the coming months.”

An incoming ‘payment shock’

It’s not just the loans themself that will cause strain for households—many consumers with student debt took on additional financial obligations over the payment pause, like home and auto loans or credit cards. That means their overall debt has increased over the past three-and-a-half years, particularly for borrowers who were already in financial distress prior to the pandemic.

“Adding the new payments to the mix will be a noticeable payment shock,” says Liz Pagel, senior vice president of consumer lending at TransUnion.

That said, while some households, particularly lower-income ones, will feel stretched, others may be okay, Oxford Economics reports. “We think some households—mainly middle- and upper-income households—may respond to the resumption of student loan payments by drawing down remaining excess savings,” the report reads.

Borrowers are already getting ahead of the payments, likely to make a dent in their principle before significant interest began accruing on their loans once again. They repaid over $2 billion the week of Sept. 7, and a record $3.6 billion during the week of September 1, according to Treasury receipts from the U.S. Department of Education analyzed by Haver Analytics. At this time last year, payments for the week were closer to $400 million.

At the same time, the pause helped many households achieve other goals, like buying homes, paying off other consumer debt, or simply get by even as prices for essentials sky-rocketed. Adding the bills back on will take away from those gains.

Even high-earning households are feeling the squeeze, with 71% of those earning at least $100,000 saying they expect to miss at least one payment when they resume, according to Morning Consult.

“Saving for retirement seems trivial when student loans loom over our heads. And starting a family seems impossible with the cost of childcare on the rise,” one borrower earning $125,000 a year previously told Fortune. “I recognize that I’m extremely privileged, but I still feel mounting pressure when it comes to our finances.”

Those who can’t afford their payments have a few options. They can enroll in an income-based repayment plan, like the new SAVE plan, which calculates what borrowers owe on their household size and income, among other factors. That can reduce their bill.

As a last resort, borrowers can skip their payments for the next year without the usual negative consequences. The Biden administration announced a 12-month “grace period,” during which borrowers won’t be considered delinquent if they miss a payment, and the credit bureaus will not be informed (that said, the Education Department warns credit scores could still be impacted). Interest will accrue, but it won’t capitalize.