The US government’s student loan payment pause doesn’t end for a few months, but financial anxiety is already setting in for borrowers – most of whom say they won’t be able to handle the bill.
A new investigation from business intelligence firm Morning Consult found that resuming payments will have a major impact on the financial security of 3 in 5 student borrowers, particularly women and members of low-income households. Some 58% of respondents said they would probably or definitely not be able to afford it.
Federal student loan payment requirements have been suspended since the start of the pandemic. In late August, President Joe Biden’s administration extended the hiatus for a seventh and final time; it is now due to expire on December 31. The extension was announced alongside a federal student loan forgiveness program, which will relieve up to $10,000 in debt for eligible borrowers earning less than $125,000. (Borrowers who received a need-based Pell Grant in college may qualify for a rebate of up to $20,000.)
Morning Consult surveyed a representative sample of 715 Americans with student loan debt in the days following Biden’s announcement.
The company found that among households earning less than $50,000 a year, 68% of respondents said they could not afford to resume payments. Just over half of people earning between $50,000 and $100,000 said the payments would cause them difficulty. And that goes for large and (relatively) small loan charges: More than half of those surveyed who owe less than $25,000 said returning to payments would be unaffordable.
According to a Federal Reserve Report from 2019.
Other federal Data generally shows that student loan debt has the greatest impact on low-income households. A report from the American Association of University Women found that women hold about two-thirds of US student debt.
This was reflected in the Morning Consult poll, in which 65% of women said resuming payments would disrupt their financial security, compared to 52% of men.
Higher levels of education showed little influence on people’s ability to pay. While more borrowers who did not graduate said resuming payments would cause financial hardship, 58% of respondents with advanced degrees and 56% of bachelor’s degree holders said they were in the same boat.
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