As Student Debt Relief Programs Stall, New Report Shows Borrowers are Struggling

As several of the Biden administration’s student loan debt relief programs are blocked, delayed, or under fire, a new report suggests that many student loan borrowers continue to struggle following the economic upheaval of the pandemic and ongoing inflation.

The “Beyond Student Debt Report,” released last week by the Student Debt Crisis Center, is essentially a survey of surveys. It compiles information gleaned from tens of thousands of participants in multiple polls and surveys over a two-and-a-half year period between 2020 and 2022. The results of the report suggest that key Biden administration initiatives, such as the extensions of the student loan pause and student loan forgiveness initiatives, have been crucial to the well-being of a large portion of borrowers.

Key findings in student loan survey

Key findings in the “Beyond Student Debt Report” survey include the following:

• Borrowers experienced food insecurity at a rate that is over 60 percent higher than the national average between 2020 and 2022.
• The percentage of student loan borrowers struggling to pay for healthcare and medicine increased by 34% between 2020 and 2022.
• Student loan borrowers struggling to afford rent increased by 17% between 2020 and 2022, and they were more than eight times more likely to experience housing insecurity than the national average.
• More than half of student loan borrowers reported feeling anxious, stressed, or depressed – much higher than the national average of 15.6%.

“Even prior to the pandemic, borrowers were grappling with these difficulties, and now, the situation has been exacerbated, making their plight all the more dire,” says the report. “Despite the implementation of pandemic-related federal relief programs, such as the student loan payment pause, borrowers continue to face challenges in affording basic needs.”

Key Biden administration student loan forgiveness and debt relief programs face challenges

The Biden administration has taken numerous steps to provide relief to struggling student loan borrowers. But many of these initiatives have been blocked, delayed, or face challenges. This has resulted in unprecedented uncertainty for many borrowers. 

The administration’s signature mass student loan forgiveness plan announced last year, which could cancel up to $20,000 for millions of borrowers, was blocked by federal courts in response to legal challenges before it could get off the ground. The Biden administration appealed those challenges to the Supreme Court, which heard oral arguments in February. A decision is expected in June. But it is not clear whether the Court will allow the program to proceed. And in the meantime, no borrowers have received any relief under the initiative. Senate Republicans also recently announced their intent to try to repeal the program legislatively through the Congressional Review Act, before the Supreme Court issues a ruling.

Barriers to Biden's latest student loan pause extension

The ongoing extension of the student loan pause – now entering its fourth year – has also been a central element of the Biden administration’s student debt relief program. The pause has suspended payments and stopped interest accrual on all government-held federal student loans, and has stopped all collections efforts against defaulted federal student loan borrowers. But Biden’s latest extension of the pause is facing challenges on numerous fronts. Republicans in Congress have vowed to file legislation repealing the pause. SoFi, a major student loan refinancing company, has filed a lawsuit against the Education Department to force an end to the payment pause. And with the administration set to end the national Covid emergency in May, Biden could lose the central justification for any further extension of the relief.

Budget issues are causing complications and timeline setbacks for various Biden student loan debt relief initiatives

Meanwhile, budget constraints imposed by Congress have caused implementation problems and delays across several other Biden administration student loan debt relief initiatives. Borrowers seeking student loan forgiveness under the Limited PSLF Waiver have had to contend with months-long processing times, confusing or inaccurate letters, and overwhelmed phone lines with key student loan servicers. The Education Department quietly announced this week that implementation of much of the IDR Account Adjustment – another initiative that could result in widespread student loan forgiveness – would be delayed until 2024. And the Biden administration has not even announced a concrete timeline for implementing the overhaul of the Revised Pay As You Earn (REPAYE) plan, which could result in significantly reduced monthly payments and a faster path to student loan forgiveness for millions.

Those budget challenges are only getting more perilous, as the Biden administration and Congressional Republicans battle over federal spending and the debt ceiling. Last week, Education Secretary Miguel Cardona warned that further cuts proposed by Republicans, “would have devastating effects on student and parent interactions with the Department, as well as on their ability to successfully apply for and receive student aid.” Cardona wrote further that, “even if funding were kept at the FY 2022 enacted level, more than 40 million student loan borrowers would be impacted through decreased service hours and longer turnaround times to make changes to student loan repayment plans, or obtain a deferment, forbearance, or discharge of student loans.”

Advocates urge Biden administration to continue pushing for student debt relief

Advocacy groups for borrowers continue to push the Biden administration to provide relief to struggling borrowers, particularly in light of the new report.

“The findings of [the Beyond Student Debt report] are deeply alarming. Millions of families are at risk of going hungry, being homeless, and harming their health due to the burden of student debt,” said Natalia Abrams, President and Founder of Student Debt Crisis Center, the organization that issued the report. “We call on policymakers to take every step necessary to protect borrowers, including extending the payment pause and canceling debt.”