Americans student loan balance tops $1.6 trillion; nearly half of borrowers havent resumed payments

Student loan borrowers in the US are taking their time resuming repayments after the last pandemic-related pause expired late last year.Repayments were paused for borrowers of federal student loans from mid-March 2020, when the COVID pandemic began, and remained in effect until Sept.1, 2023, 3½ years after the repayment pause began.Data from the Department of Education shows that, as of the end of March of this year, almost 20 million borrowers have resumed making payments on their student loans, while roughly 19 million haven’t done so, leaving their accounts in a state of delinquency, default or otherwise paused through deferment or forbearance, The New York Times reported.Borrowers have until September to take advantage of a so-called on-ramp that allows them to hold off on making payments without having the non-payments reported to credit bureaus.However, their accounts continue to accrue additional interest while the on-ramp is in effect.The data showed that 42.8 million recipients of federal student loans owed a total of $1.62 trillion in debt as of the end of March.The number of recipients declined to its lowest level since the third quarter of 2022 amid President Biden’s student loan handout plans that have sought to cancel or reduce outstanding balances for borrowers.Several iterations of Biden’s student loan debt cancelation plans have been rejected or put on hold by federal courts, prompting the administration to explore different ways to approach the issue that may pass legal muster.The Biden administration’s new income-driven repayment (IDR) program, known as the Saving on a Valuable Education (SAVE) Plan, was the latest version to encounter legal headwinds.

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