New Data Shows Federal Student Loan Borrowers Face Confusion in Resumption of Payment

New
Survey
Data
from
Embold
Research,
Sponsored
by
SoFi,
Shows
Federal
Student
Loan
Borrower
Confusion
and
Misconceptions
Around
Resumed
Payments

Understanding
the
current
state
of
federal
student
loan
repayment

In
October
2023,
federal
student
loan
borrowers
received
their
first
bill
in
nearly
three-and-a-half-years,
following
the
end
of
the
student
loan
moratorium.
Throughout
the
payment
pause,
significant
dialogue
and
updates
to
student
loan-related
policy
took
place,
including
various
loan
forgiveness
initiatives,
new
income-driven
repayment
plans,
and
forbearance
extensions.

To
gain
a
deeper
understanding
of
the
current
landscape
for
student
loan
borrowers
following
the
resumption
of
their
bills,
Embold
Research
conducted
a
study,
sponsored
by
SoFi,
that
surveyed
1,006
federal
student
loan
borrowers
nationwide
from
February
29
–
March
11,
2024.
Notably,
the
research
was
completed
before
the
Biden
Administration

proposed
a
new
set
of
rules
aimed
at
providing
student
loan
debt
relief
for
certain
borrower
groups
on
April
16,
2024.

Key
insights
from
the
survey
showed
the
following:

•  Nearly
40%
of
federal
student
loan
borrowers
have
not
resumed
payments
since
the
end
of
the
moratorium
in
October
2023.
Borrowers
report
a
variety
of
challenges
to
repayment
including:
financial
strain,
confusion
over
government
policy
(especially,
related
to
broad-based
loan
forgiveness),
the
need
to
adjust
their
budgets,
and
feelings
of
anxiety
or
stress.

•  Nearly
half
of
borrowers
report
that
they
have
changed
their
plans
for
repayment
due
to
public
discourse
on
loan
forgiveness.

•  A
majority
of
borrowers
believe
that
the
federal
government
has
not
been
effective
in
communicating
about
the
end
of
the
moratorium
and
their
repayment
options.

•  This
belief
is
particularly
pronounced
among
borrowers
without
a
Bachelor’s
degree
and
those
from
lower-income
households.
These
borrowers
are
less
likely
to
feel
they
understand
the
details
associated
with
their
loans
and
are
much
less
likely
to
be
aware
of
alternative
repayment
programs,
such
as
income-driven
repayment
(IDR)
plans,
intended
to
help
those
from
lower-income
households.

What
does
the
data
tell
us?

First
and
foremost,
borrowers
are
facing
numerous
challenges
in
paying
their
loans,
with
some
not
submitting
a
payment
at
all.

Importantly,
the
data
shows
that
public
discourse
surrounding
student
loans
and
the
guidance
and
communication
borrowers
receive
are
leaving
them
confused
and
influencing
their
payment
trajectories.
This
heightens
the
already
stressful
burden
of
student
debt,
leaving
some
borrowers
without
the
information
they
need
to
make
informed
decisions
or
not
take
any
actions
to
pay
down
debt.

Finding
a
path
forward

Without
clearer
guidance,
borrowers
can
miss
out
on
repayment
programs
that
may
help
them
effectively
navigate
loan
repayment,
like
income-driven
repayment
plans,
refinancing
options
and
more.
Failure
to
manage
these
payments
effectively
can
have
long-lasting
repercussions,
impacting
credit
scores,
financial
stability,
and
future
ability
to
borrow
for
other
important
life
purchases
like
a
home
or
car.

At
SoFi,
we
understand
that
many
of
our
members
are
facing
these
same
challenges.
SoFi’s
mission
is
to
help
our
members
get
their
money
right
and
that
includes
educating
borrowers
about
fundamental
details
associated
with
student
loans.

If
you
have
questions
about
federal
student
loans
or
repayment
options,
visit
SoFi’s

Student
Loan
Debt
Guide
for
more
information
or
SoFi
members
can
work
with
a
certified
financial
planner
at
no
additional
cost.

For
more
details
on
the
survey,
visit

https://emboldresearch.com