Last month, $7.7 billion was approved as the latest round of student loan forgiveness, offering many Americans the opportunity to make their way out of the seemingly endless student loan repayment cycle.

The topic of student loan forgiveness – a hot one in political discussions – is far from new. What is the state of student loan repayment since payments have resumed after being paused during the COVID-19 pandemic? The latest CivicScience data sheds light on the ever-evolving situation. 

As it stands, just 33% of student loan holders have been making regular payments toward their loans since repayment started up again in October. Additionally, more than one-third of student loan holders say they do not plan to make any payments – a figure that increases to 50% for lower-income respondents making less than $25K per year.

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With 58% of student loan holders indicating that they are at least ‘somewhat’ or ‘very’ concerned about paying their student loans, it’s clear that tension around this topic is high.1 The concern may not be unfounded, as more than 60% of Americans with student loans say their student loan debt is impacting their ability to save for retirement. This is true among student loan holders across income levels, but especially among those making $100K or less a year.2

Deferment, Forbearance, and Default Are Common

And as polling data show, the current state of student loans does not necessarily inspire much confidence. Many borrowers are looking for ways to suspend loan repayment, despite continuing to accrue interest. New data reveal a plurality of loan holders have deferred their loans, but 14% report they have one or more loans currently in forbearance, meaning having received a temporary pause on repayment for up to 12 months, while 14% say it’s likely they will apply for forbearance.

Perhaps more concerning, 9% of borrowers have defaulted on their loans and 6% expect they will go into default. If repayments continue as they have been, the majority of student loan holders will experience forbearance, deferment, or default at some point. 

Is Forgiveness the Answer? 

Of course, this isn’t the only story in the world of student loans. After all, student loan forgiveness is possible for some, and more than 50% of borrowers are seeking or receiving loan forgiveness – 18% have already received forgiveness on one or more loans, while 21% are waiting on approval and 22% are likely to apply. 

Additionally, nearly 1-in-2 borrowers have enrolled or plan to apply to the Biden administration’s SAVE Plan, an income-driven repayment plan that aims to lower the debt burden of those eligible. This is very close to the percentage of respondents who said they intended to apply around the time the plan was first announced in July 2023. 

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What about those who are making payments on their student loans? Perhaps not surprisingly, those who have been making regular payments are the most likely to feel satisfied with their credit score. Yet, regular student loan ‘repayers’ and those who plan to start making regular repayments soon are also the most stressed. This suggests that while there are obvious financial benefits to student loan repayment, the process may still take an emotional toll. 

Given the tough situation for student loan holders, many may ask themselves what their next steps should be. Bury their head in the sand and run the risk of default to avoid the added financial and emotional strain of making regular payments? Continue making payments and focus on the satisfaction of their credit score improving as their loans decrease? Or perhaps, do what many have done – keep an eye on the news and hope that their loans will be forgiven in totality, while seeking assistance through deferment, forbearance, and government-sponsored repayment programs like the SAVE plan in the meantime. 

Stay tuned for continued coverage of the student loan debt crisis and its impact on consumers, or get in touch to access more up-to-the-minute data and insights available in the CivicScience InsightStore.

  1. 839 responses from 02/29/2024 to 5/29/2024, excluding ‘N/A – I don’t have any student loan debt’ ↩︎
  2. 554 responses from 05/28/2024 to 5/29/2024, excluding ‘Does not apply’ ↩︎