As student loan payments resumed in October, only 60% of borrowers made payments, according to new data from the U.S. Department of Education [6a83c975]. This highlights the ongoing challenges faced by borrowers, with many still struggling to make payments even before the pandemic-induced payment pause. The figures exclude borrowers who didn't have a payment due in October due to returning to school or recent actions by the Department to address servicing errors. Betsy Mayotte, president of The Institute of Student Loan Advisors, attributes the lack of payment to borrowers not realizing payments have come due. The resumption of student loan payments has significant implications, as interest on federal student loans began accruing again on September 1, and borrowers who don't make payments will see their balances grow. The student loan crisis in the U.S. continues to worsen, with outstanding education debt exceeding $1.7 trillion and the average loan balance at graduation tripling since the '90s [6a83c975].
The resumption of student loan payments has had a significant impact on borrowers' financial situations. A study by TransUnion found that two-thirds of student loan borrowers were caught by surprise when the U.S. Department of Education announced the resumption of student loan repayments in October 2023 [14adeeed]. The study also revealed that more consumers believe their household finances are worse than planned compared to the previous quarter, although more consumers today say their finances are better than a year ago. The study showed that inflation for everyday goods is the top financial concern for consumers, followed by a recession, rising interest rates, increased housing prices, jobs, and stock market volatility. Among consumers with student loans coming due, 57.6% plan to make all monthly payments, 29.6% expect to pay partial amounts, and 12.8% do not plan to make payments. Millennials were found to have the most federal student loan repayments, but they are also the generation best positioned to make these payments. The study showed that Millennials are generally in a better financial position, with a higher percentage expecting income increases and stating that their income is keeping up with inflation. Additionally, Millennials have a higher appetite for credit compared to other generations [14adeeed].
Despite the challenges, some borrowers are taking action to address the burden of student debt. There is a growing movement of borrowers considering debt strikes to force policy changes and advocate for debt cancellation. This pressure on policymakers to address student debt is increasing, highlighting the need for major policy efforts to alleviate the burden of student loans. Experts and economists are calling for debt cancellation and a complete overhaul of the higher education financing system to ensure educational attainments and long-term economic growth [097a0f4c].
As of October, only 60% of student loan borrowers made a payment, and the U.S. Department of Education warned of a potential increase in delinquency and defaults due to the COVID-19 pandemic [10c0708c]. The Supreme Court blocked President Biden's plan to cancel up to $20,000 in student debt per borrower. Outstanding student loan debt in the U.S. exceeds $1.7 trillion. Activists describe the situation as a 'massive student debt strike,' with experts attributing the repayment problems to lack of preparation and overwhelmed servicers. The transition back to repayment after the payment pause has been difficult. Interest on federal student loans began accruing again on September 1. It is expected to take until early 2024 for things to normalize [10c0708c].
Freddie Williams Jr., a graduate of Morehouse College, had his student loans paid off by billionaire businessman Robert F. Smith, clearing around $125,000 in debt. The Morehouse Class of 2019 is the subject of a documentary exploring the impact of graduating debt-free. The total student loan debt in the U.S. is nearly $1.8 trillion, causing many young people to delay major financial decisions. The federal student loan program has enabled colleges to raise tuition without consequence, leading to an average student loan debt of $29,400. The Biden Administration has expanded existing programs to cancel $167 billion in debt, but experts say more needs to be done to address the underlying problem. Lafayette College President Nicole Hurd believes that some debt is okay, but not tens or hundreds of thousands of dollars. Over 40 million Americans have student loan debt, with 3.5 million owing more than $100,000. The average interest on student debt is 6.87 percent, and the average length of repayment is 21.1 years. The story of the Morehouse Class of 2019 highlights the immense weight of student debt and the opportunities that arise when it is relieved. [df5605cc]
29% of borrowers say student loan debt will have a major influence on their vote in the upcoming 2024 presidential election, according to a recent study [51edb5f7]. The study also found that 46% of borrowers consider student loan debt a national crisis. Around 43 million Americans owe more than $1.6 trillion in student loan debt, with most borrowers owing between $20,000 and $40,000. The impact of student loan debt on voting is significant, with President Joe Biden and former President Donald Trump potentially having to make student loan debt a key part of their campaign platforms. Trump paused student loan interest and payments during the COVID-19 pandemic, while Biden extended the pause until late last year. However, Biden's efforts to provide relief for borrowers were blocked by the Supreme Court. The Biden Administration has forgiven $167 billion for 4.75 million Americans, but there is still a need for further action to address the student loan debt crisis. 36% of Americans with student loan debt approve of the president's handling of student loan debt, while 34% disapprove. Trump opposes canceling student loan debt and has proposed eliminating subsidized Stafford loans and public service loan forgiveness. The study also revealed that one in four borrowers are having trouble affording their monthly payments on federal student loans and do not expect to ever be able to pay off their student loan debt [51edb5f7].
The issue of student loan waivers has emerged as an important election issue in the upcoming US presidential elections. According to a Bankrate survey, 1 in every 5 students said that student loan waivers would have a major influence on their voting choice. The US Federal Reserve reports that more than 40 million borrowers owe a total of $1.77 trillion in loans. The two leading candidates, Biden and Trump, have opposing views on this issue. Biden's administration has forgiven loans totaling $160 billion for nearly 4.6 million people, while Trump has supported a repayment scheme based on the borrower's family income and size. The average cost of an undergraduate degree in the US ranges from $25,707 to over $218,000, and the average student debt in 2023 was $38,787. Maryland has the highest average student loan size of $42,861, followed by Georgia with an average of $41,639. The survey found that 27% of respondents believe that the government has not done enough to help students, and close to a third consider it a national crisis. 25% of respondents expressed their inability to repay the loans in their lifetime. [e7457555]