72% of Federal Student Loan Borrowers Aren't Financially Ready to Resume Payments
Student Loan Hero report finds that figure jumps to 86% among borrowers whose income was impacted by the coronavirus pandemic
CHARLOTTE, N.C., March 31, 2022 /PRNewswire/ -- As the Biden administration weighs whether to extend the current moratorium on federal student loan payments beyond May 1, Student Loan Hero, a LendingTree company, sought to gauge American debtors' feelings towards a potential resumption in loan payments.
The online student debt education platform today announced the findings of its latest survey of more than 1,050 student loan borrowers, and found that 72% of federal loan borrowers say they're not financially ready to resume monthly payments.
Key Findings
- 72% of federal loan borrowers say they're not financially ready to resume submitting monthly payments. That jumps to 86% among borrowers whose income was impacted by the coronavirus pandemic and hasn't returned to normal.
- More than half of borrowers who haven't made federal loan payments put their monthly savings toward necessary expenses, such as housing costs or groceries (52%). Others used the money to pay off other debts (30%) and get back onto their feet financially (28%).
- 78% of borrowers with federal or private student loans that don't qualify for the moratorium have faced difficulty making their monthly payments throughout the pandemic. And crippling student debt isn't a new trend: 39% of all borrowers had significant trouble affording their student loan payments even before the pandemic.
- One possible solution: 73% of those who have refinanced their student debt say doing so made their payments more manageable. However, just 12% of borrowers have refinanced.
"The White House is undoubtedly weighing a potential uptick in defaults as part of its decision on whether to extend the moratorium yet again or offer mass student loan forgiveness," according to Student Loan Hero certified student loan counselor and education finance expert Andrew Pentis. He adds, "Many borrowers were confident that the President Biden-directed Department of Education would offer meaningful student loan support, according to our January 2021 survey."
To view the full findings, visit: https://studentloanhero.com/featured/resuming-payments-survey/
Methodology
Student Loan Hero commissioned Qualtrics to conduct an online survey of 1,050 student loan borrowers aged 18-55 from March 2-11, 2022. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.
We defined generations as the following ages in 2022:
- Generation Z: 18 to 25
- Younger millennial: 26 to 35
- Older millennial: 36 to 41
- Generation X: 42 to 55
About Student Loan Hero
Student Loan Hero, a subsidiary of LendingTree, combines easy-to-use tools with financial education to help the millions of Americans living with student loan debt manage and pay off their loans. The website provides information about repayment options, including refinancing, income-driven repayment, and deferment. Student Loan Hero has helped more than 250,000 borrowers manage and eliminate over $3.5 billion in student loan debt since 2012 and assists over 3.5 million people in becoming more financially healthy every year.
Founded in 2012 by CEO Andrew Josuweit, who himself had over $100,000 in student loans, Student Loan Hero operates on the belief that all loan help and recommendations should come with honesty and no hidden agenda.
For more information, visit https://studentloanhero.com.
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SOURCE Student Loan Hero
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