Economy

Student-loan payments resume in 75 days, and 89% of borrowers with full-time jobs aren’t ready: ‘It’s a recipe for financial disaster’

On February 1, 2022, the student loan support received from the beginning of the illness will be removed and reimbursed, regardless of whether it is completed or not.

And most of them don’t.

The Student Debt Crisis Center, in partnership with Saviga, released the results of Part Four of the Student Debt x COVID-19 series on Wednesday to examine the impact of the disease on student loans. It turned out that although the student loan company’s network has improved since June, 89% of full-time borrowers say they do not have enough funds to start paying again in a few months.

One in five respondents said they never felt financially secure to start repaying their student loans again.

“So far, we’ve seen their loan officer and the Department of Education identify money borrowers, and student borrowers are hired at high salaries,” said Cody Hounanian, student magazine’s best editor. Debt crisis center, said Insider. “And despite that good news, nine out of ten borrowers say they’re not ready to repay by February 1.”

Hounanian said that although borrowers were fully employed, 27% of them said that a third of their income would go to monthly payments and one in ten said that half of their income would go directly to the student loan.

“Considering how much and how much of their income goes to student loans at a time when the country is talking about rising inflation and rising inflation, it’s a measure of the economic crisis,” said Hounanian.

Clay founder Aaron Smith told Insider that the average income of all the borrowers in the study was about $ 63,000, and “the idea is great. Up to 10% and one – third of their income could go to student loans.”

Other main studies out of 33,000 response studies include:
88% of respondents said lipstick was critical to their financial well-being at the time of the illness;
87% said the help allowed them to pay other bills during the illness;
44% of all borrowers said they were insolvent or insolvent;
And 45% of respondents said their financial well-being was poor or very poor.
Termination of the student loan gave borrowers the opportunity to write off the student loan debt and dedicate their income to routines and fees. For example, one borrower previously told Insider that the sickness limit allowed him to pay all the medical bills associated with the birth of a child, and many others have reported that concerns are imminent.

“I’m really worried about recovering wages because I have to earn an extra $ 200,” Gwen Carney, an unmarried grandmother with $ 75,000 in student debt, told  earlier. “I don’t have it.”

Even after a pandemic break, millions of borrowers are no better off
Insider said on Tuesday that, according to new data from the Education Department, 93% of the 7.7 million borrowers who did not make loan payments at the beginning of the pandemic are still there.
It is known that the department is considering a “safety net” for borrowers after the resumption of payments, one of which could involve automatically clearing the payment defaults of 7 million borrowers and giving them a “fresh start”. However, the details of these plans have not yet been finalized, leaving borrowers with minimal information about what to expect on February 1.

“It’s pretty clear that student borrowers aren’t ready to continue making payments,” Hounanian said. “So we really call on the Department of Education to issue some guidelines, to be clear about the options available to student borrowers, and to make sure that the process used by student borrowers is in place as soon as possible.”

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