The Consumer Financial Protection Bureau yesterday released the results of a survey of individuals with student loans, offering insights into how debt relief programs and repayment challenges are affecting student loan borrowers across the United States. Conducted as borrowers resumed repayments after a lengthy pause, the survey sheds light on financial hurdles and the benefits of relief for many borrowers.
Key Findings:
- Relief Programs Are a Lifeline: Nearly 61% of borrowers who received debt relief reported that it helped them make positive life changes, such as relocating, saving for major purchases, or starting a family. However, challenges persist — 42% of federal student loan borrowers have never used anything but the standard repayment plan, largely because they were unaware of alternatives or found them too difficult to navigate.
- Difficulty in Repayment: More than 60% of surveyed borrowers reported having trouble making payments at some point, and 37% have missed at least one payment. The pandemic-era payment pause provided meaningful relief — 80% of impacted borrowers reported at least one positive outcome, including paying down other debts and saving more.
- Income Challenges: Debt relief mostly reached borrowers with incomes below the median household income in the U.S. In 2022, the median household income for those receiving relief was between $50,000 and $65,000, compared to the national median of $75,000.
Between the lines: The CFPB survey reveals significant inequities in the student loan system. Minority borrowers, along with those with incomes under $50,000, are more likely to face challenges accessing income-driven repayment (IDR) plans — often because they aren’t aware of these options or face barriers in the enrollment process.
What’s next: As repayment resumes, borrowers are expected to adjust spending to accommodate payments. The CFPB found that over 80% of borrowers planned to take budgetary actions like saving less or cutting back on large purchases. Nearly half reported that they would need to cut back on essentials like food or medicine to make payments.
The bottom line: The CFPB’s findings indicate that while debt relief programs have positively impacted many borrowers, significant gaps remain in awareness and accessibility of repayment options.
