According to a survey, 30% of federal student loan borrowers are financially struggling!
A survey conducted by the Consumer Financial Protection Bureau (CFPB) shed a light on how federal student loan borrowers are financially struggling, showing that 30% of them report skipping essentials like food, medicine, or other necessities because of their monthly payments.
The survey, conducted between October 2023 and January 2024, included over 3,000 individuals with active or recently active student loan accounts and aimed to assess how borrowers managed their debt after payments resumed in September 2023, following the end of the Covid-era payment pause.
In addition to foregoing basic needs, 38% of borrowers said they accumulated credit card debt they otherwise wouldn’t have. Furthermore, 44% delayed buying a home due to their student loans, and 26% postponed starting a family. Student loan debt in the U.S. now exceeds $1.6 trillion, affecting nearly 43 million people – 1 in 6 adult Americans, according to a 2022 report by the Congressional Research Service.
“It’s clear that many borrowers are struggling with repayment, and there is more work to be done to ensure repayment options are accessible and effective”, said CFPB Director Rohit Chopra in a statement.
Student Loan Relief
The CFPB report, released during President Joe Biden’s final months in office, highlights the significance of the relief measures implemented by his administration. Biden has forgiven more student loan debt than any other U.S. president, with over $175 billion in cancellations benefiting around 5 million borrowers.
Borrowers who had their loans forgiven experienced notable improvements in their lives, with 61% of borrowers reporting that debt relief had allowed them to make a beneficial change in their life sooner than they otherwise would have, according to the CFPB report. 45,1% of them were able to save more money, 8,9% started a business or switched jobs, and 18,8% sought medical care after their debt was cleared.
The CFPB report also showed that the median household income of borrowers who received loan forgiveness ranged from $50,000 to $65,000 – significantly lower than the U.S. median household income of over $80,000.