Student loan borrowers are pinning their financial futures on debt forgiveness
With the return of student loan payments looming, federal loan borrowers are stuck in limbo as President Biden's debt forgiveness plan remains stalled in court. A recent survey has revealed that a majority of people with student loans feel like "their debt is standing between them and financial wellbeing," CNBC reports.
Fifty-three percent of the 1,009 federal student loan borrowers surveyed by Credit Karma said that their financial stability depends on their loans being forgiven. Pending a decision from the Supreme Court, the student loan repayment pause is expected to end sometime this summer, over three years after it was first implemented in response to the pandemic and following multiple extensions. "But for struggling borrowers," CNBC writes, "adding those payments back into their budget won't be easy."
Most borrowers say the pause has helped them feel financially secure, but that security may dissipate once payments resume. According to the survey, 56 percent of the respondents said their "financial stability relies on not being required to make payments." Despite having more financial wiggle room, 1 in 4 people surveyed said they could not save during the forbearance because that money had to go to other necessities.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The Supreme Court is set to hear oral arguments at the end of the month before sharing its final decision on the administration's plan to forgive up to $20,000 in student debt. The justices put the plan on an indefinite pause until they resolve the two lawsuits seeking to reverse the president's decision. Courtney Alev, a consumer financial advocate at Credit Karma, says "borrowers should start budgeting now" since the outcome of the trials remains uncertain. "Once payments resume, you'll have less disposable income, so you'll need to revisit your spending habits to ensure you have sufficient funds to put toward bills, necessities, and your student loans."
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Theara Coleman has worked as a staff writer at The Week since September 2022. She frequently writes about technology, education, literature and general news. She was previously a contributing writer and assistant editor at Honeysuckle Magazine, where she covered racial politics and cannabis industry news.
-
India elections start amid violence, hate speech accusations
Talking Points Narendra Modi seeks a third term while critics worry about the future of the country's democracy
By Joel Mathis, The Week US Published
-
'Biden is smart to keep the border-security pressure on'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
Bird flu worries mount as virus found in milk, cows
Speed Read The FDA found traces of the virus in pasteurized grocery store milk
By Peter Weber, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published