It’s been three months since the federal government resumed student loan payments, but many borrowers have refused to pay a single penny…
Activists say borrowers have staged a “massive student debt strike” as they await progress—any progress—on the White House’s student loan forgiveness program.
“Faced with the impossible choice of feeding their kids, keeping a roof over their head, or throwing an average of $400 a month into the Department of Education incinerator, borrowers are rightly choosing to keep themselves and their families financially afloat,” said Astra Taylor, co-founder of Debt Collective, a union advocating on behalf of debtors.
According to the Department of Education, 22 million borrowers had payments due in October but only 13 million settled their bills.
That means 40% of borrowers failed to make payments.
Creditnews reported in September that the resumption of student loan payments would hit American families hard, but very few expected four out of ten borrowers to miss payments. Before the pandemic, about one-quarter of student loan borrowers were dodging payments.
Some experts think the transition back to loan repayment after more than three years of forbearance will be bumpy. As it turns out, students aren’t the only ones to blame.
What has changed since the pandemic?
Student loans went into forbearance in March 2020 just as Covid-era lockdowns forced millions out of work. Over that period, Americans grew accustomed to not paying back their loans and used the money to tackle other expenses like rent or grocery bills.
Reallocating up to $500 a month to student loan payments was always going to be difficult—especially with high inflation and elevated borrowing costs.
But according to Persis Yu, deputy executive director at the Student Borrower Protection Center, it wasn’t just borrowers who were unprepared for the October shock.
“Neither borrowers nor the student loan system were prepared to resume repayment,” Yu told CNBC.
“Servicers are overwhelmed and are failing to help struggling borrowers navigate the options that are available to them,” she said.
Carolina Rodriguez of the nonprofit Education Debt Consumer Assistance Program agrees. “Servicers are having a very hard time getting people back into repayment,” she said.
And this is the privileged youth of today. No accountability. Just whiny, ” I DONT WANT TO”!
Waaa !!!!
If they get their loans paid, then I want my bills paid too!!!
Start garnishing every income source, institute massive payment by in kind services at nominal wages, bring back poorhouses and work camps, put liens on private properties and possessions, use internet, radio and TV to air loan payback encouragement (and threats) and put a few high visibility theft cases through the courts with convictions that include a payback schedule and ankle monitor (no more Starbucks and weekly nail touchups until we’re square, Pal).
Or just do nothing except continue to whine and write apologies.
Nawww 4:43 pm – Just start throwing them in jail for a minimum of one week. Want out of jail? Automatic withdrawal from bank account to get out. Decide to drain your account or refuse? Stay in jail. My money is on the debtors agreeing to the above conditions. Then they go out and find a side hustle (a legal one) or work a second or third job like the rest of us. Welcome to being an adult.
How are they NOT paying? They have to have their student loan account linked to a bank account…or do they just drain their accounts before the loan payment is automatically taken out? Both my kids sure as heck have their money being taken by the government for their loans…and they sure don’t think that taxpayers should pay back the money THEY CHOSE to borrow to got o the college of their choice…
Do some research… You sign up for automatic withdrawals. I just go on line to the loan servicer and make a payment. The loan server pushes people into signing up for automatic withdrawals. You can go on line with your loan server and opt-out of automatic withdrawals.
I bought a new truck and I dont want to pay for it
Then, don’t. Obiden will pay for it for you.