Morning Consult Study Finds 3/5 of Student Loan Borrowers Won’t Be Able to Afford Repayments When Moratorium Ends in January
A recent Morning Consult survey found that with the federal student loan payment moratorium ending next year, a majority of borrowers do not think they will be able to afford their repayments. 30 percent of respondents said they would probably not be able to make repayments, and 28 percent said they would definitely not be able to make the payments.
The survey indicated that student loan repayment would be harder on women and low-income households. Women were more likely than men to say they would not be able to make their student loan payments, with women at 66 percent and men at 45 percent. Census Bureau data shows that as of 2017, women were 28 percent more likely to have student loan debt than men.
Among households making less than $50,000 annually, 68 percent said they would have difficulty making their payments, while 53 percent of households making between $50,000 and $100,000 yearly said the payments wouldn’t be affordable. Even 54 percent of borrowers who owe less than $25,000 on their loans said the payments would be difficult to make.
60 percent of respondents said that resuming student loan payments would have a major impact on their financial stability, while only 10 percent said it would have no impact on their financial security. In 2019, the typical payment for student loans was between $200 and $299 per month according to the Federal Reserve, but with current inflation, those figures may be more difficult to afford.
Borrowers will also risk losing financial progress made during the pandemic; 82 percent of young adult borrowers with at least a bachelor’s degree said they were doing OK financially during the forbearance period. In May, however, the Fed noted that the last quarters of 2021 saw rising default rates and credit card debt, as well as decreasing creditworthiness.
“On balance, these borrowers have seen their financial positions improve during the pandemic, but there are some signs of distress,” the Fed wrote.