- The Student Debt Crisis Center found that 93% of student loan borrowers are not ready to resume payments.
- It also revealed that 92% of fully employed borrowers are worried about payments linked to rising inflation.
- Student loan payments are expected to resume on May 1 as many push Biden to write off student debt.
President Joe Biden may have extended the pause on student loan repayments for a third time, but that doesn’t mean borrowers are more ready to pay off their debt in just over two months.
The Student Debt Crisis Center (SDCC), in partnership with Savi – a social impact tech startup – released its fifth installment in the Student Debt x COVID-19 series on Wednesday which examined the toll the pandemic has taken and continues to take. , on student borrowers. It found that, of the 23,532 borrowers surveyed, 92% of those with full employment fear paying payments on May 1 due to rising inflation.
“We have been tracking the experiences of student borrowers for more than two years and are saddened to report that their situation is getting worse,” Natalia Abrams, president and founder of SDCC, said in a statement. “Our results show that the ongoing pandemic combined with unprecedented inflation are huge headwinds for borrowers who overall are not ready to resume payments, are struggling to meet their basic needs and are confused about their options moving forward.”
Since March, federal student loan payments have been suspended as part of pandemic relief measures implemented by Presidents Donald Trump and Biden. While borrowers, advocates and some Democratic lawmakers hailed the relief, they also argued that given the apparent success of Biden’s debt relief extensions, he should go ahead and reverse the debt relief altogether. federal student debt. But it hasn’t yet, and with payments resuming on May 1 as student debt of $1.7 trillion continues to grow, some borrowers feel they won’t be ready to pay another monthly bill.
Other key findings from the survey include:
- 93% of borrowers are not ready to resume payments on May 1 and 27% say they will never be ready to resume payments again.
- 91% of fully employed borrowers disagree that the economy has recovered from the effects of the pandemic.
- 95% of black borrowers are not ready to resume payments on May 1.
- And 61% of borrowers who could easily pay their debts before the pandemic are now struggling to make payments, cannot make payments or are in default.
Although COVID-19 cases may decline, survey results show student borrowers are worse off. Insider reported on the fourth installment of SDCC’s survey in November, which found that 89% of borrowers with full-time jobs did not feel financially secure enough to start repaying.
Cody Hounanian, executive director of SDCC, told Insider at the time that even those full-time borrowers were worried because 27% of respondents said a third of their income would go to making monthly payments, and one respondent in ten said half of their income will go directly to paying off their student debt.
“When you think about this huge, huge part of their income that goes into student loans at a time when the country is talking about rising inflation and rising costs, that’s a recipe for financial disaster,” he said. Hounanian said.
That’s why organizations like the SDCC, along with Democratic lawmakers like Massachusetts Sen. Elizabeth Warren and Senate Majority Leader Chuck Schumer, are pushing Biden to write off student debt, saying it will boost the economy and put end to an unavoidable cycle of indebtedness.
Republican lawmakers have rallied against the student loan payment breaks, citing their costs to taxpayers, but despite pressure from his own party, Biden has yet to comment on when, or if, more relief is coming.