- The Student Debt Crisis Center found that 93% of student loan borrowers are unwilling to resume payments.
- It also found that 92% of full-time borrowers are concerned about payments as inflation rises.
- Student loan payments are set to resume on May 1 as many urge Biden to cancel student debt.
President Joe Biden may have extended the pause on student loan payments for a third time, but that doesn’t mean borrowers are ready to pay off their debts in just over two months.
The Student Debt Crisis Center (SDCC), in partnership with social impact startup Savi, on Wednesday released its fifth installment in the Student Debt x COVID-19 series, which has examined the toll the pandemic has taken and continues to take, for student loan borrowers. It found that of the 23,532 borrowers surveyed, 92% of full-time workers are concerned about making May Day payments due to rising inflation.
“We have followed the experiences of student borrowers for over two years and are sad to report that their circumstances are deteriorating,” said Natalia Abrams, president and founder of SDCC, in a statement. “Our findings show that the ongoing pandemic, coupled with unprecedented inflation, poses tremendous obstacles for borrowers who, by and large, are unwilling to resume payments, are struggling to afford their basic needs, and are unsure of options they have for the future.”
Since March, federal student loan payments have been suspended as part of pandemic relief efforts undertaken by both Presidents Donald Trump and Biden. While borrowers, advocates and some Democratic lawmakers have praised this relief, they have also argued that given the apparent success of Biden’s debt-forgiveness extension, he should go ahead and scrap federal student debt altogether. But he has yet to do so, and with payments set to resume on May 1 as the $1.7 trillion student debt burden continues to grow, some borrowers are left feeling they won’t be ready to afford another monthly bill.
Other important results of the survey are:
- 93% of borrowers are not ready to resume payments on May 1, and another 27% say they will never be ready to resume payments.
- 91% of fully employed borrowers disagree with the notion that the economy has recovered from the impact of the pandemic.
- 95% of black borrowers are not ready to resume payments on May 1st.
- And 61% of borrowers who could easily afford their pre-pandemic debt payments are now either struggling to make payments, can’t make payments, or are in default on their debt.
While COVID-19 cases may be declining, survey results show student loan borrowers are worse off. Insider reported the fourth edition of the SDCC survey in November, which found that 89% of borrowers with full-time jobs didn’t feel financially secure enough to make repayments.
SDCC executive director Cody Hounanian told Insider at the time that even these busy borrowers were worried because 27% of respondents said they spend a third of their income on monthly payments, and one in 10 respondents said half of that income goes directly into it paying off their student debt.
“If we think about having this huge, huge chunk of their income going on student loans while the nation talks about rising inflation and rising costs, that’s a recipe for financial disaster,” Hounanian said.
That’s why organizations like the SDCC, along with Democratic lawmakers like Massachusetts Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer, are urging Biden to forgive student debt, saying it will kickstart the economy and start a cycle of inevitable debt.
Republican lawmakers have rallied against student loan pauses, citing their cost to taxpayers, but despite pressure from his own party, Biden has yet to comment on when or if more relief is coming.