Struggles and Options for Student Loan Borrowers: A Closer Look

Struggles and Options for Student Loan Borrowers: A Closer Look

The burden of student loan debt in the United States has reached alarming levels, surpassing $1.7 trillion. This staggering figure highlights the challenges faced by many borrowers, especially when it comes to resuming their loan payments. Recent data from the U.S. Department of Education reveals that only 60% of individuals with federal education loans have made a payment since the repayments restarted after a three-year-long reprieve. This article delves into the factors contributing to the difficulties faced by borrowers and explores the various options available to them.

Student loan debt has now become a more significant burden for Americans than credit card or auto debt. The average loan balance at graduation has tripled since the 1990s, with borrowers now facing an average debt of $30,000 compared to the previous $10,000. Additionally, approximately 7% of borrowers owe more than $100,000. These rising debt levels, coupled with the financial strain caused by the ongoing pandemic, have made loan repayment a significant challenge for many borrowers.

The Biden Administration’s Response

In recognition of the difficulties faced by borrowers, the Biden administration has taken steps to provide relief. One such measure is the implementation of a 12-month “on ramp” to repayment, aiming to shield borrowers from the immediate consequences of falling behind. President Joe Biden has also expressed his administration’s intention to find a way to cancel student debt, especially after the Supreme Court rejected their initial plan. These actions indicate a commitment to addressing the student loan crisis and offering support to struggling borrowers.

For borrowers unable to make payments, one option is to explore deferment. Experts recommend checking eligibility for deferment, as certain loans may not accrue interest during this period. Unemployment deferment is available for those who are jobless when student loan payments resume. Individuals facing financial challenges outside of unemployment, such as economic hardship, may be eligible for an economic hardship deferment. Lesser-known deferments, such as the graduate fellowship deferment, military service and post-active duty deferment, and the cancer treatment deferment, provide additional relief options for specific circumstances.

While forbearance is another option for borrowers, it can have long-term consequences. Under forbearance, loans can be put on hold for up to three years. However, interest continues to accrue during this period, resulting in a larger overall debt when the forbearance ends. Borrowers using forbearance should at least try to make interest payments to prevent their debt from increasing exponentially. Financial experts caution against relying solely on forbearance and recommend considering it as a last resort.

Income-driven repayment plans offer an alternative for borrowers who struggle to afford their monthly bills. These plans cap payments at a percentage of discretionary income and offer forgiveness of remaining debt after 20 or 25 years. The Biden administration has introduced a new repayment option called the Saving on a Valuable Education (SAVE) plan, which allows borrowers to pay just 5% of their discretionary income towards their undergraduate student loans, with some individuals even qualifying for a $0 monthly bill. However, it is important to note that the full benefits of this plan may not take effect until the summer of 2024 due to regulatory changes.

Utilizing Online Resources

To determine the best repayment plan for specific circumstances, borrowers can utilize online calculators available at or These resources provide valuable insights into monthly payment amounts under different plans, enabling borrowers to make informed decisions about their loan repayment strategies.

Student loan borrowers face numerous challenges when it comes to resuming their loan payments. The overwhelming debt crisis, exacerbated by the ongoing pandemic, has left many individuals struggling to make ends meet. However, various options are available to provide relief. While deferment and forbearance should be approached with caution, they can offer temporary solutions. Income-driven repayment plans provide long-term affordability, and the Biden administration’s efforts to introduce more flexible options demonstrate a commitment to tackling the student loan crisis. By utilizing online resources and seeking guidance from financial experts, borrowers can navigate the complex landscape of student loan repayment and find a path to financial stability.


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