One in five Americans with student loans has never made a payment toward their debt, a new survey revealed.
A wide-ranging poll showed that a fifth of student loan borrowers (20 percent) say they have not yet made any payments, with many saying they can’t afford to during the cost-of-living crisis. Of these respondents, some are hopeful that loan forgiveness plans may be available to them in the future.
The survey was conducted online by polling company Qualtrics between August 3 and August 19 on behalf of credit score firm Intuit Credit Karma. Some 1,995 adults, all aged over 18 and with outstanding student loans, responded to a series of questions about their debts.
The survey suggests that lower-income borrowers are being hit particularly hard, with 65 percent of those earning less than $50,000 in household income saying they cannot afford their student loan payments.
More than half (55 percent) of all student loan borrowers say they cannot afford their payments right now.
Even some higher earners say they are struggling: 40 percent of student loan borrowers say they are trapped because they make too much money to qualify for the Saving on a Valuable Education (SAVE) plan but not enough to afford to pay off their student debt.
President Joe Biden speaks about student loan relief at Madison College in Madison, Wisconsin, on April 8. A new survey found that one in five Americans with student loans has never made a payment toward their debt.
ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
The Biden administration’s SAVE Plan, a repayment program that could also offer loan forgiveness for millions of Americans, is currently on hold following a Republican backlash. The Supreme Court is due to give a final decision on the plan, although that is not expected until next summer at the earliest.
The fate of the SAVE plan has sparked much confusion among the borrowers, with 68 percent saying they have struggled to follow the court updates and understand what it is likely to mean for them.
Nevertheless, roughly three-quarters (76 percent) of student loan borrowers are hopeful the SAVE plan will be implemented. And more than one-third (36 percent) say they are not making consistent on-time payments toward their loans now in hopes that their debt will be forgiven.
Newsweek reached out to the White House for comment.
Courtney Alev, consumer financial advocate at Intuit Credit Karma, said: “Student loan debt continues to stand in the way of many Americans’ ability to reach their financial goals, whether they’re fresh out of college or approaching retirement. And, with Biden’s SAVE plan in limbo, many borrowers face uncertainty as to whether or not they will benefit from lower monthly payments and a clear path to loan forgiveness.
“We know from our study that one-in-five borrowers have made zero payments toward their student loans, which means their balances have been growing, especially now that interest has accrued for nearly a year now. These borrowers could find themselves in an unruly amount of debt.
“While it’s great to have hope in potential loan forgiveness, borrowers should not put all their eggs in that basket. Those struggling to make their student loan payments should reach out to their loan servicer to understand their options, whether that be forbearance, deferment, or a more affordable repayment plan.”
Biden’s administration said in April that nearly 8 million people had enrolled in the SAVE plan and that 4.5 million borrowers have monthly payments of $0. The president has rolled out several rounds of loan forgiveness for those working in public service despite facing legal roadblocks.
