- The Student Debt Crisis Center found 93% of student-loan borrowers aren't ready to resume payments.
- It also found 92% of fully-employed borrowers are concerned about payments along rising inflation.
- Student-loan payments are set to resume on May 1 as many are pushing Biden to cancel student debt.
President Joe Biden may have extended the pause on a student-loan payments a third time, but it doesn't mean borrowers are any more prepared to pay off their debt in just over two months.
The Student Debt Crisis Center (SDCC), in partnership with Savi — a social impact technology startup — released its fifth installment of the Student Debt x COVID-19 series on Wednesday that has examined the toll the pandemic has taken, and continues to take, on student-loan borrowers. It found that, of the 23,532 borrowers it surveyed, 92% of those who are fully-employed are concerned about affording payments on May 1 due to rising inflation.
"We have followed the experiences of student loan borrowers for over two years and we are saddened to report their circumstances are getting worse," Natalia Abrams, president and founder of SDCC, said in a statement. "Our findings show that the ongoing pandemic combined with unprecedented inflation are huge obstacles for borrowers who are, by and large, not ready to resume payments, struggling to afford basic needs, and confused about their options moving forward."
Since March, federal student-loan payments have been paused as part of pandemic relief measures implemented by both Presidents Donald Trump and Biden. While borrowers, advocates, and some Democratic lawmakers have lauded that relief, they also have argued that given the apparent success of Biden's extensions of debt relief, he should go ahead and cancel 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 load continues to grow, some borrowers feel they will not be ready to afford another monthly bill.
Other main findings from the survey include:
- 93% of borrowers are not prepared to resume payments on May 1 and another 27% say they'll never be prepared to resume payments again.
- 91% of fully-employed borrowers do not agree with the notion the economy has recovered from the impacts of the pandemic.
- 95% of Black borrowers are not prepared to resume payments on May 1.
- And 61% of borrowers who could easily afford their debt payments before the pandemic are either now struggling to make payments, cannot make payments, or are in default on their debt.
While COVID-19 cases may be going down, the survey results show student-loan borrowers are worse off. Insider reported on SDCC's fourth installment of the survey in November, which found that 89% of borrowers with full-time jobs didn't feel financially secure enough to enter repayment again.
Cody Hounanian, executive director of SDCC, told Insider at the time that even those fully-employed borrowers were worried because 27% of respondents said one-third of their income would go toward making monthly payments, and one in ten respondents said half of their income will go right into paying off their student debt.
"When we think about that huge, huge chunk of their income going to student loans at a time when the nation's talking about rising inflation and increased costs, it's a recipe for financial disaster," 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 cancel student debt, saying it will stimulate the economy and shut down a cycle of inescapable debt.
Republican lawmakers have rallied against the student-loan payments pauses, 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.