Three-fourths of respondents are not financially secure enough to begin making student loan payments again, uncertain when they will be beyond January 31
Media Contacts:
Cody Hounanian, Student Debt Crisis, cody@studentdebtcrisis.org, (646) 820-8037
Ian Coon, Savi, ian@bysavi.com, (515) 822-8834
Washington, DC, December 7, 2020— Student Debt Crisis, the nation’s largest student debt advocacy organization, and Savi, a social impact technology company working to help solve the crisis, completed a nationwide survey last week with 58,733 student loan borrowers. The survey is a longitudinal comparison against a similar survey conducted in April.
Even with the recent announcement of a short-term extension suspending student loan payments and interest until January 31, 2021, the findings are bleak, underscoring that student loan borrowers are worse off now than in the spring. While the short-term federal relief was generally helpful to borrowers impacted by the economic damage of COVID-19, most are facing long-term challenges that will remain for months or years to come.
77% of borrowers do not feel financially secure enough to resume payments on federal student loans until June 2021 or later.
65% of borrowers are facing increased anxiety, depression, or stress due to the burden of student loan debt during the COVID-19 pandemic.
52% of borrowers rate their current financial wellness as poor or very poor since the COVID-19 pandemic began in March. Only 21% rated their financial wellness as poor or very poor prior to the pandemic.
35% of healthcare workers with student loan debt have experienced reduced work hours caused by the COVID-19 pandemic.
Borrowers of color are disproportionately likely to report missing a rent or mortgage payment, experience food insecurity and homelessness or be unable to afford healthcare and medicine during the pandemic due to their student loan payments.
“This is the largest survey of student loan borrowers we’ve undertaken with a 51% increase in responses from our first series in April. People are deeply concerned about the continuing impact of COVID-19 and their student debt burden is creating uncertainty about the future. The data shows that borrowers are not even close to ready to begin making payments again when relief ends on January 31st. Healthcare workers, educators, and people of color are even less certain of their financial security.” said Natalia Abrams, Executive Director of Student Debt Crisis. “Student debt relief policies are rapidly changing and borrowers want elected officials to know the difficulties they face. With Congress still negotiating additional relief, and The White House failing to use its authorities to provide a permanent solution, we’re echoing the voices of our supporters to call for bold relief that is right and just by Americans during this crisis.” “Savi fully supported extending the student loan payment pause until January 31, 2021 as borrowers continue to struggle in the wake of COVID-19. We know that many borrowers were concerned about payments resuming in January and this provides some needed relief,” said Aaron Smith, co-founder of Savi. “We will continue to work to educate and support student loan borrowers. No one should have to choose between going to the doctor and putting food on the table vs. making a student loan payment in the midst of an unprecedented pandemic.”
Savi and Student Debt Crisis are urging every loan borrower who is or will be struggling to make their monthly payment to enroll in an existing federal income-driven repayment plan to receive an affordable (as low as $0/month) monthly payment and avoid defaulting on their loan. A free COVID-19 Student Loan Aid Tool will be available until January 31, 2021 to assist borrowers with the enrollment process digitally. In a separate survey, Pew Charitable Trusts found that there was likely to be a significant amount of confusion and strain on student loan servicers around the resumption of payments, and similarly urged borrowers to act ahead of time.
Additional survey findings, including a downloadable and shareable report, can be found online at https://studentdebtcrisis.org/student-debt-covid-survey-2/.
The poll received 58,733 full completed responses from borrowers in all 50 states from November 30 to December 4, 2020. Findings can be broken down by demographic, geographic, occupational and socioeconomic statuses upon request.
About Student Debt Crisis
Student Debt Crisis is a non-profit (501(c)(4)) organization dedicated to fundamentally reforming student debt and transforming higher education loan policies. Student Debt Crisis is committed to advocating for big structural change and to working directly with borrowers to understand their challenges and fears, repayment obstacles and frustrations. They are on the frontlines addressing the vital issues to student loan borrowers and strengthening consumer protection policies with legislators and the media. At the same time, they work in conjunction with higher education experts on educating and equipping borrowers to take charge of their own debt with lectures, workshops and helpful resources.
About Savi
Savi is a social impact technology startup based in Washington, D.C. that is working to solve the student debt crisis affecting 46 million borrowers by helping them discover new repayment and loan forgiveness options. Founded by long-time student loan experts and advocates, Savi is a Public Benefit Corporation that has identified for borrowers more than $200 million in projected forgiveness. Savi works with employers, membership organizations, and financial institutions to provide our service as a unique student loan benefit. Follow on Twitter at @bysavi and Facebook at @bySaviUSA.
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