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This week, the Department of Education resumed collections on defaulted student loans, marking a major policy shift after years of pandemic-era relief. The move carries sweeping implications, as millions of Americans already in default now face the prospect of wage garnishment, and the potential loss of tax refunds, Social Security, or disability benefits. With even more borrowers at risk of default in the coming months, CivicScience has the most up-to-date data on how Americans with student loan debt feel about their ability to repay those loans and what it could mean for brands in the weeks and months ahead.
Student Loan Repayment Concern Is Up, and Higher Income Borrowers Are Worried Too
The latest CivicScience data show 66% of those with student loans are at least ‘somewhat’ concerned about paying them back. This percentage has steadily risen from 58% in Q2 of last year. While this is unsurprisingly led by lower to middle income loan holders, those making $150K+ are the most likely to be ‘very’ concerned about repayment.
Take our Poll: How often do you struggle to pay back your student loans?
Leaning on Hardship Withdrawals
Hardship withdrawals from retirement savings have become a financial lifeline for some Americans in order to manage emergency expenses. This is particularly true for those with student loans who are concerned about paying their student loans (among those with retirement savings). Twenty-nine percent of those at least ‘somewhat’ concerned about repayment say they’ve had to make hardship withdrawals to cover emergency expenses over the past year. Another 40% report that they likely will have to do this soon, too. The renewed possibility of garnishment of retirement savings adds another layer of concern for their future financial security.
Where Anxious Student Loan Borrowers Are Cutting Back
As expected, those anxious about student loan repayments are far more likely to cut back on spending than the Gen Pop. When it comes to some significant areas below, consumers concerned about their student debt are notably more likely to scale back their spending on essentials like groceries and gas, as well as clothing.
Weigh in: Do you think student loan debt is a crisis in America?
Tariff Anxiety and Behavioral Shifts
Student loan collection resumption adds a wrinkle to an already uncertain market amid tariff policies. CivicScience data show that those who are concerned about paying their student loans are more than twice as likely as those not concerned to say they are buying now before tariff-driven price hikes happen. They’re also more likely to buy now than they are to delay their purchases.
The feelings of uncertainty and fear are also contributing to other behavioral shifts. Americans who are concerned about student loan debt repayment are more likely than those unconcerned to plan on switching insurance companies in the next year. They’re also more likely to switch banks in the next 30 days compared to those who are not worried about their student loans.
Use this Data: CivicScience clients leverage real-time data like this to monitor any signals that may impact their growth and retention efforts amid the current climate of economic uncertainty.
As student loan collections resume, the renewed threat of garnishment and financial strain is colliding with growing concerns around tariffs, adding fuel to an already uncertain consumer landscape. CivicScience data show this uncertainty is pushing anxious borrowers to act—cutting spending, tapping retirement savings, accelerating purchases, and switching insurance providers and banks —signaling potential ripple effects for brands across essential and discretionary categories alike.
