Enrichment Education

7.8M people at high risk of struggling to pay student loans if pause expires

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Story at a glance

  • Nearly 8 million people could struggle to repay their student loans if President Biden lifts the payment moratorium set to expire May 1.
  • The pandemic-related pause on student loan payments relieved at least 28 million Americans of their federal student debt obligations the past two years.
  • Borrowers who owe 25 percent of the collective debt will be at a high risk of missing a payment.

Nearly 8 million people could struggle to repay their student loans if President Biden lifts the payment moratorium set to expire May 1, according to a new analysis.  

The pandemic-related pause on student loan payments, which began in March 2020 and has spanned two administrations, relieved at least 26 million borrowers of their federal student debt obligations interest free for the past two years.  

new analysis by the nonpartisan California Policy Lab and the Student Loan Law Initiative revealed that the student loan pause has positively affected millions. Researchers found a decline in borrowers credit card use and increased credit scores. The moratorium also lowered borrowers’ overall debt obligations by $210 per month.  

“Put plainly, the pause on student loan payments worked,” said Professor Dalié Jiménez, Director of the Student Loan Law Initiative at UC Irvine Law.  

“This new research shows that when people with student debt were thrown an economic lifeline by the government, they caught it— building stronger credit, paying down other debts, and weathering the pandemic while limiting damage to their financial lives,” Jiménez added.  

But should the moratorium end in May, researchers concluded 7.8 million borrowers who owe 25 percent of the collective debt will be at a high risk of missing a payment. Borrowers meeting the at-risk criteria were delinquent or in default the year before the pause, had a collection or bankruptcy show up on their credit report during the pause or if they currently have a “deep subprime” credit score.  

The analysis showed the average loan balance for borrowers included in the pause was $36,800, while 31 percent owed $10,000 or less. Around 43 million people collectively owe close to $1.6 trillion. 


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Progressive advocates and lawmakers are urging Biden to extend the pause and continue to overhaul the student loan system, including forgiving up to $50,000 in debt per borrower.  

A group of Democratic lawmakers pressed the president in a letter earlier this week to again extend the payment freeze through the end of the year as the cost of common goods continued to rise.  

“Millions of borrowers have benefitted from the pause in payments. Although progress has been made, we believe it is vital to ensure that we continue to work to alleviate the continued impact the pandemic is having on families across the country,” they said.  

“Unemployment remains higher than two years ago, and families are experiencing significant price increases on household goods, food, and energy,” the lawmakers added.  

White House chief of staff Ron Klain signaled earlier this month that Biden could extend the pause for a fourth time in his presidency.  

“The president is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” Klain said on an episode of the podcast “Pod Save America.”  


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