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Survey: 85% of High-Debt Borrowers Support Partial Student Loan Cancellation — But Not a Clean Slate

Over the past year, the U.S. government worked to alleviate federal student loan stress by putting payments and interest accruals on a freeze. Although this pause is active through September 30, 2021, our recent Mental Health survey shows it’s done little to alleviate the anguish around student loan debt.

In fact, 1 in 14 respondents reported suicidal ideation due to their student debt. We found that the rising cost of tuition, and owing much more than what one earns were the main culprits.

Student loan cancellation would have a greater impact on mental health and has been a big part of the conversation on the election trail. Interestingly enough, though, high-debt borrowers that we surveyed don’t support canceling all student loans, but the majority support some student loan cancellation.

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The majority say “no” to canceling all student loan debt

From previous Student Loan Planner® surveys, we know that the majority of our readers and the email list are progressive. As of our Election Survey, 50% were Democrats, 20% were Republicans, and 20% were Independent.

Even though most survey respondents are progressive and have high student debt that would benefit from student loan cancellation, only 32% of respondents said they supported canceling all student loan debt. That means 68% of respondents don’t support canceling all student loan debt.

Though close to one-third of respondents said “yes” to cancellation for all student loan debt, there’s more nuance to the story.

Most respondents support some student loan cancellation

As mentioned above, only 32% of respondents said they support canceling all student loan debt. A larger majority supported some student loan cancellation, under certain conditions.

Close to 15% of respondents said student loan debt should be canceled for low-income borrowers only. Thirty-nine percent of respondents said to cancel some student loan debt for everyone. Approximately 85% of respondents support some amount of student loan debt cancellation. This sentiment is in line with President Biden's position compared to loan cancellation proposals from Bernie Sanders.

During the election, Biden campaigned with the platform that he supported up to $10,000 in student loan forgiveness. In recent news, he’s getting pressure to increase that amount and is currently in talks with the U.S. Secretary of Education to see if it’s possible to cancel up to $50,000 in student loans.

According to a CNBC article, “Canceling $50,000 for all borrowers, on the other hand, would shrink the country’s outstanding student loan debt balance to $700 billion, from $1.7 trillion.” The article also states that this amount of student loan cancellation would wipe out student loan debt for nearly 80% of federal loan borrowers.

15% steadfastly say “no” to student loan cancellation

Based on our data, another 15% of student loan borrowers said didn’t support student loan cancellation at all. That’s nearly 1 in 7 respondents, many of whom are high-debt borrowers who’d benefit from having their debt canceled.

A clear majority (60%) of respondents with a high debt-to-income ratio don’t support the cancellation of all student loans despite having a student loan balance that’s two times their income.

However, as we’ve seen through the rest of the data there’s broad support for canceling some amount of debt — just not giving borrowers a clean slate.

Loan cancellation views differ by profession

Survey results found that an overwhelming majority of respondents felt anxiety due to their student loans, despite the existing federal loan payment and interest deferment.

According to the data, the likelihood of mental health struggles and suicidal ideation went up as borrowers owed more than they earned. It comes as no surprise, then, that views on cancellation differed by profession.

Low-income professions that were more likely to support student loan cancellation, included professionals like social workers, teachers and nurses. Conversely, highly paid professionals — who likely have higher student debt, like engineers, doctors and dentists — were less likely to support student loan cancellation.

Bottom line

Even though many of our respondents are progressive, the data’s clear that not nearly as many people are looking for a “free ticket” out of student loan debt. The majority don’t want all of their student loan debt canceled. This key finding debunks the myth that borrowers are irresponsible and want an easy way out of their educational debt.

It also suggests that many borrowers are in favor of Biden’s plan of offering some amount of student loan debt cancellation. Whether the cancellation amount is $10,000 or $50,000 is to be determined.

This next step of student loan relief could be the mental health support that student loan borrowers need — not forgiveness that’s tied to a decade of public service through Public Service Loan Forgiveness, or temporary freezes for loan payments and interest.

New loan cancellation changes will usher in a huge change in the student loan landscape and might have a greater impact on borrowers’ mental health and their student debt figures.

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Comments

  1. Ryan April 15, 2021 at 6:26 PM
    Reply

    Wish they would apply PSLF loan forgiveness one year and 10% at a time.

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