Student Loan Update as Millions of Americans Slow Down Repayments

Nearly one third of all student loan holders have slowed down their repayments, a new survey has found.

Polling conducted by The Harris Poll for Nerdwallet found that 31 percent of America’s 43 million student loan debtors have slowed down payments in the hope they will be reduced or forgiven by the federal government. Of the 600 borrowers surveyed between July 16 to 18 this year, nearly one in four, or 23 percent, said they had stopped paying their loans back completely.

If directly translated from the polling, this would amount to around 13.33 million student loan holders having slowed their payments.

As part of its wide-ranging efforts to financially unburden those with education debts, the Biden-Harris administration has forgiven $138 billion in student debt cancellation for almost 3.9 million borrowers so far, according to the White House.

One of the forgiveness plans, Saving on a Valuable Education (SAVE), was introduced in 2023 following a Supreme Court strike down of Biden’s previous student loan debt relief plan, which would have forgiven up to $20,000 in student loan debt for eligible borrowers.

Biden said in February: “In the wake of the Supreme Court’s decision on my Administration’s original student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible, as quickly as possible.”

The new plan, SAVE, aims to lower monthly payments for many borrowers and allow those with remaining balances of $12,000 or less to get their debts cleared after a decade. However, whether the plan will continue remains to be seen after several Republican-led states filed lawsuits against the plan, resulting in a federal appeals court blocking the plan. It now awaits a decision from the Supreme Court.

The Department of Education has said the SAVE plan has helped more than 8 million debt holders as of May 2024. While the case works its way through the legal system, borrowers will be placed into interest-free forbearance.

“The SAVE plan is a clearly authorized and urgently needed effort to fix what’s broken in our student loan system and make financing a higher education more affordable in this country,” the Department of Education said in a statement shared with Newsweek. “The Biden-Harris Administration remains committed to delivering as much relief as possible for as many borrowers as possible.”

The lack of certainty over whether there will be more federal aid for student loans is also a concern of some graduates. A quarter of survey respondents said they are apprehensive that recent student loan forgiveness efforts will be reversed by the courts.

Twenty-two percent of those polled said that student loan forgiveness is one of the most important issues at play when it comes to choosing who to vote for in the 2024 presidential election. In a recent survey conducted by Bankrate, one in five Americans, or 18 percent, said student loan debt would have a major influence over their vote this November, and 29 percent said student loan debt is a “national crisis.”