FOR IMMEDIATE RELEASE
Cody Hounanian
cody@studentdebtcrisis.org | (646) 820-8037
Lindsay Clark
press@bysavi.com | 917-445-4979
WASHINGTON, D.C. — A new survey of 31,988 student loan borrowers finds that 83% of borrowers say the federal student loan payment pause is pandemic relief they currently depend on. The vast majority of student loan borrowers, nearly two-thirds, say they have not financially recovered from the COVID-19 pandemic. The survey shows that the payment pause is a critical lifeline for borrowers who are struggling and student debt cancellation would provide long-term relief from the persistent harm caused by the pandemic.
Three-in-ten borrowers say they will reduce spending on necessities like food, rent, and healthcare in preparation for payments to restart in January. Experts at the Federal Reserve and the Consumer Financial Protection Bureau already warn that a wave of student loan defaults and delinquencies will come when payments restart. The survey is clear evidence that extending the federal student loan payment pause and canceling student debt would provide meaningful relief now and long into the future. The survey also found that:
Nearly half of borrowers say they will be unable to afford their student loan payments six months from now.
61% say they would use savings from debt cancellation to buy food, 58% for rent and mortgage, 56% for utilities, 49% for paying down other debts, and 42% for medicine or healthcare.
Two-thirds of borrowers do not feel the COVID-19 pandemic is over.
77% support extending the federal student loan payment pause beyond December 31.
87% say they are concerned or very concerned that inflation will make it harder to afford student loan payments when they resume.
71% of respondents say their student loan servicer failed to communicate recent updates to the Public Service Loan Forgiveness program, 57% of borrowers were not told about President Biden's debt cancellation action, and 45% have not received information regarding the federal loan payment pause.
"Our survey proves that the COVID-19 pandemic is far from over for student loan borrowers. Now, with critical pandemic relief set to expire and the President’s debt cancellation plan stuck in the courts, borrowers are facing another crisis,” said Natalia Abrams, President and Founder of the Student Debt Crisis Center. “Long-term relief, like extending the federal student loan payment pause and debt cancellation, is the only way borrowers will be able to fully recover from lost jobs, health challenges, and shifts in the economy caused by the pandemic."
“Student loan payments impact whether families can afford basic necessities from food to rent,” said Tobin Van Ostern, co-founder of Savi. “We see this concern in the thousands of questions we receive from borrowers on a daily basis who are concerned about their ability to begin repaying student loans and how that process will work.”
dThe new research comes from a joint campaign between Student Debt Crisis Center (SDCC), the nation’s largest student debt advocacy organization, and Savi, a social impact technology company that helps borrowers get student loan forgiveness. The survey is the sixth installment of the Student Debt x COVID-19 campaign looking at the toll the pandemic continues to take on the 40 million student loan borrowers in America.