Survey: Pandemic No Help When It Comes To Student Debt

Number of the Day: The most relevant or interesting figure in personal finance

54%

The Balance

That’s the share of people who said they did not get closer to paying off their student loans during the pandemic, despite government relief programs aimed at helping borrowers do just that.

Most borrowers surveyed in June by the National Association of Realtors and analytics firm Morning Consult said they didn’t find the federal government’s pause on student loan interest all that helpful in getting ahead on their payments, nor did they take other steps—like cutting spending or moving back in with family or to a cheaper area—in order to chip away at their debt during the pandemic. NAR released the results Tuesday.

The findings are surprising, because the Education Department recently extended its pandemic-era 0% interest policy—as well as a suspension on student loan payments—to Jan. 31, 2022 from Sept. 30 in order to give borrowers more time to get their financial house in order. About 26 million borrowers have not had to make payments on their federal student loans thanks to the relief program, according to department data, and interest has not accrued on student loans since March 2020 for approximately 41 million borrowers.

Many borrowers have pinned their hopes on President Joe Biden or Congress wiping out at least some of their loans by offering blanket student debt cancellation. That isn’t likely to happen, but it hasn’t stopped some people from not paying their loans at all during the pandemic lest the government swoop in with forgiveness later, Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, said earlier this year. Borrowers shouldn’t change their behavior due to impending government actions, Mayotte advised.

Have a question, comment, or story to share? You can reach Rob at ranthes@thebalance.com.