Nearly Half of Student Loan Borrowers Are Not Yet Paying Their Monthly Bill
After an unprecedented three-year timeout on federal student loan payments because of the pandemic, millions of borrowers began repaying their debt when billing resumed late last year.But nearly as many have not.That reality, along with court decisions that regularly upend the rules, has complicated the government’s efforts to restart its system for collecting the $1.6 trillion it is owed.At the end of March, six months after the hiatus ended, nearly 20 million borrowers were making their payments as scheduled.
But almost 19 million were not, leaving their accounts delinquent, in default or still on pause, according to the latest Education Department data.“The nonpayment rate really is emblematic of a system that’s not doing its job,” said Persis Yu, the managing counsel for the Student Borrower Protection Center, an advocacy group.Seven million borrowers with federally managed loans were at least 30 days overdue on their payments at the end of 2023.That’s the highest delinquency rate since 2016, as far back as the department’s public records go.
Millions more had their accounts frozen through deferment or forbearance (which allows borrowers to temporarily stop making payments), and nearly six million borrowers remain mired in defaults that began before the pandemic.The reasons borrowers aren’t paying are varied.Some say they can’t afford it, while others are tangled in bureaucratic snafus.
Many people are taking advantage of an “on-ramp” period that lasts through September, during which late payments will not be reported to credit bureaus and borrowers will not be placed into default, though interest will continue to accrue.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a...