Nearly nine million people who have student loans have not yet made a payment after the moratorium on student loan payments ended three months ago, according to a published report that cited information from the Education Department.
The Big Picture: There were about 22 million people who had to start making student loan payments again, after more than three years of being allowed to skip them because of the COVID-19 pandemic. About 13 million, or 60% of those 22 million borrowers had made at least one payment by the end of the November, according to the Education Department.
- For a 12-month period that will end in October 2024, individuals who do not make student loan payments will not have information about their unpaid loans furnished to the credit reporting agencies and student loan servicers were told to suspend collection efforts toward individuals not making payments.
- So many people are not making payments because they are either having administrative problems with the companies accepting payments or because they are not able to afford making the payment. Some borrowers have had issues understanding the different repayment plans that are now available, as well.
Gaining Momentum: Restarting an operation as big as this one is not something that can be done at the flip of a switch — for borrowers and servicers. Even experts in student loans are confused with what is happening, according to the report.
More Than Expected: The Consumer Financial Protection Bureau had projected that as many as 20% of individuals with unpaid student loans had risk factors that suggested they would struggle to make payments once the moratorium ended.
Too Soon to Tell: The executive director of a trade group representing student loan servicers said seeing what the repayment rate is in January will provide a better sense of whether it will be higher or lower than before the pandemic.