Borrowing money to go to college has closed the door on many major life milestones, including completing a degree program, for most student loan borrowers, a recent Gallup survey said.
Overall, 71% of student loan borrowers who are currently enrolled college students or previously enrolled students who dropped out of their program have had to put off a major life event. Roughly 29% of student borrowers have delayed buying a home, and 28% have put off purchasing a car as a result of student debt. Another 22% have had to stay put in their childhood home, and 20% have delayed starting a business because of debt.
Moreover, 15% said they’ve put off plans to have children, and 13% aren’t getting married because student loan debt is holding them back. Additionally, 35% of student loan borrowers who dropped out said debt has kept them from completing their postsecondary program.
Unsurprisingly, student loan borrowers with higher debt put off more milestones than borrowers with less debt. However, the survey said that student debt in any amount has pushed Americans to delay important personal milestones.
“However, even relatively modest student loan amounts have a significant impact — 63% of those who have borrowed less than $10,000 in student loans say they have delayed major life events due to their loans,” the survey said.
Private student loan borrowers can’t benefit from federal loan relief. But you could lower your monthly payments by refinancing to a lower interest rate. Visit Credible to speak with an expert and get your questions answered.
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Borrowers struggle to repay student loans
Student loan payments resumed in October last year, following a 42-month payment pause. While there are several avenues for relief, millions of borrowers have missed at least one payment, a recent Intelligent.com survey said.
Over one-third (36%) of borrowers who have yet to make any payment said they planned to resume as soon as possible, with the same number saying they are unsure when they’ll resume payments. Another 12% of these borrowers said they are using the Biden administration’s ‘on-ramp’ to student loan repayment, in which borrowers won’t face penalties like having missed payments reported to credit bureaus in September 2024.
While most borrowers have missed payments because they can’t afford them, 9% have boycotted payments to pressure the government into canceling student debt. Most of these borrowers hope their efforts will bring attention to the student loan debt conversation.
If you hold private student loans, you won’t be enrolled in a federal income-driven repayment plan, but you could refinance your loans to a lower rate. Visit Credible to compare options from different lenders without affecting your credit score.
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Biden pushes for more student debt forgiveness
President Biden’s Saving on a Valuable Education (SAVE) Plan could lower borrowers’ monthly payments to zero dollars, reduce monthly costs in half and save those who make payments at least $1,000 yearly.
Since the launch of SAVE, nearly 8 million borrowers have received relief, including 4.5 million with a $0 monthly payment. The latest round of cancellations targets $7.4 billion in student loans for 277,000 borrowers, the Department of Education said in a statement. This brings the total debt forgiven over Biden’s presidency to $153 billion.
Biden also recently released a formal proposal to eliminate student debt for millions of more Americans. The plan, an alternative to his original debt forgiveness proposal blocked by the Supreme Court last June, would provide student debt relief to over 30 million borrowers.
The plan would waive up to $20,000 for millions of borrowers whose balances have grown because of unpaid interest and automatically discharge debt for borrowers eligible for loan forgiveness under SAVE, closed school discharge or other forgiveness programs, even if not enrolled. Additionally, student debt for borrowers who entered repayment for 20 or more years would be discharged. The plan would also provide relief to borrowers who experience hardship in paying back their loans.
“These distinct forms of debt relief are designed for borrowers struggling with their loans – and that’s a lot of people,” said Under Secretary of Education James Kvaal. “There are 25 million borrowers whose interest is growing faster than they can pay it down. That fact alone shows how badly President Biden’s student loan relief is needed.”
If you’re having trouble making payments on your private student loans, you won’t benefit from federal relief. You could consider refinancing your loans for a lower interest rate to lower your monthly payments. Visit Credible to get your personalized rate in minutes without affecting your credit score.
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