Thus, 89% of student loan borrowers are not ready to repay their student loans as of February 1, 2022.
Here’s what you need to know.
A new survey from the Student Debt Crisis Center, a nonprofit focused on student debt, found alarming statistics on student loans and student loan repayments:
- 89% of full-service student loan borrowers say they are not âfinancially secureâ enough to restart federal student loan payments on February 1;
- 21% they will never be financially secure enough to any student loan repayment again; (How to get a student loan discount)
- 27% of respondents say at least 33% of their income will be spent on student loans when payments resume in February; (Here’s who qualifies for the student loan waiver right now)
- 10% of respondents say that at least 50% of their income will be used to repay their student loans; (These borrowers are not eligible for the student loan exemption)
- 44% of fully employed student loan borrowers reported that they could not pay their monthly student loan payments or were in default; and
- 45% of those polled say their financial well-being is currently bad or very bad, compared to 25% who said the same thing before the Covid-19 pandemic.
“… As the economy recovers, even fully employed student loan borrowers are not financially secure enough to repay their payments,” said Natalia Abrams, president and founder of the Student Debt Crisis Center. âSimply put, Americans in debt are not facing a jobs crisis, they are facing a student debt crisis. When the payment break ends on February 1, borrowers will have the carpet under them as they work to get back on their feet. “
Borrowers are unaware of major changes to student loan cancellations
Surprisingly, 36% of nonprofit employees said they were unaware of the major changes to student loan cancellation that are now making it easier to cancel your student loans. President Joe Biden, who canceled $ 11.5 billion in student loans, continued to help student loan borrowers and announced major changes to the student loan forgiveness, which relaxes the rules for qualifying for the student loan forgiveness. (Here’s who qualifies for the student loan waiver right now). According to the new changes, public service loan forgiveness program student loan borrowers can count student loan payments for FFELP and Perkins loans, late and incomplete payments, student loan payments from the bad credit plan. student loan repayment and even student loan payments made prior to student loan consolidation. This week, the US Department of Education announced that $ 2 billion in student loans will be canceled in a matter of weeks. While the Department of Education and student loan services should notify student loan borrowers of new changes to student loan cancellation, the survey suggests that at least a representative sample of student loan borrowers are not aware of the latest opportunities to cancel student debt. (How to Apply for a Limited Student Loan Discount).
Elizabeth Warren warns of dangers of ending student loan relief
Credit Senator Elizabeth Warren (D-MA), a staunch defender of student loan cancellation, for warning the Biden administration to prematurely restart federal student loan payments. (How to get a student loan forgiveness even if you don’t work in the public service). Warren said the Biden should extend student loan relief from the Covid-19 pandemic – which included the temporary forbearance of student loans – beyond the expiration date of January 31, 2022. Warren is particularly concerned by financially vulnerable student loan borrowers who may be struggling to pay off their student loans or face default on their student loans. However, the Biden administration said federal student loan payments would resume from February 1 and there would be no extension.
With the end of student loan relief, expect federal student loan payments to start again on February 1. Are you ready? Now is the time to assess all of your student loan repayment options. Here are some popular ways to pay off student loans faster: