This survey provides a unique view into borrowers’ payment behavior in the months leading up to the resumption of payments, their reasons for not making payments (if they did not make them), their expected repayment capacity as payments resume, and the strategies they anticipated employing to afford their monthly student loan payments.

The trends we identify in the data suggest that the federal student loan borrower pool is highly fractured, with some borrowers likely to support their payments, some likely to experience occasional payment inconsistency, and others likely to experience continued, chronic repayment struggles that are not primarily the result of pandemic-related transitory financial shocks but rather are more systemic in nature. Consistent with CFI’s May 2022 report on student loan repayment, the pandemic-era blanket forbearance simply postponed a day of reckoning for those struggling with repayments that they consider to be unaffordable.

Our paper highlights five key findings from our analysis:

  • Some borrowers made payments throughout the pandemic, others resumed making payments after the payment resumption was announced, and most have not made payments in the last year or longer. Even as of June 2023, the Department of Education appeared to be collecting approximately $1 out of every $7 that would be normally due each month.
  • A relatively small number of borrowers made lump-sum or excess payments in July–September 2023, totaling an estimated $10 billion. Because borrowers making lump-sum or excess payments do not represent the larger majority of loan holders, their behavior was unlikely to be driving significant trends in the overall economy. In other words, it is likely that reasons unrelated to the payment restart were behind the recent observed changes in economic indicators and that the macroeconomic effects of the payment restart from the majority of borrowers resuming payments may still be forthcoming.
  • Many borrowers anticipated struggling with their loan payments in October. The highest shares of borrowers who expected to make no payments in October were among low-income borrowers, borrowers with less than a bachelor’s degree, those ages 36–45 years old, and Black borrowers.
  • Most borrowers who anticipated missing payments typically struggle making their payments because of systematically, chronically low or inconsistent incomes, not pandemic-related or temporary reasons. In fact, a group’s expected future repayment capacity is strongly correlated with whether borrowers in those groups made payments in the previous three months.
  • Most borrowers would benefit from the new Saving on a Valuable Education (SAVE) income-driven repayment (IDR) plan recently announced by the Department of Education, and the benefit is concentrated among those groups of borrowers who are most likely to report expecting missed payments in October. Borrower groups most likely to benefit from the SAVE IDR plan include low-income borrowers, borrowers with less than a bachelor’s degree, borrowers ages 65 or older, and Black borrowers. Conversely, only about one-third of borrowers are unlikely to qualify for or benefit from the SAVE IDR plan, yet the data show that it is precisely that group of borrowers who are least likely to report that they expect not to be able to make payments.
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