Less than 11 percent of school loan borrowers are making their scheduled loan payments during this COVID-19 hysteria, a new report finds.
According to CBNC, only 4.6 million of 42 million school loan borrowers are still paying down their education debt.
In August, the federal government offered student loan holders the option to take a pause in their loan payments to address other pressing needs during this coronavirus crisis. Now, according to the data analyzed by higher education expert Mark Kantrowitz, loan holders are taking full advantage of the program.
Student loans have long outpaced credit card and auto debt as a burden to Americans, and each year 70% of college graduates start off their lives in the red. The average balance is around $30,000, up from $10,000 in the early 1990s, but many borrowers owe $100,000 or more. The typical monthly payment is $400.
U.S. Department of Education press secretary Angela Morabito said that while “the vast majority of our loan portfolio is currently in forbearance,” borrowers made nearly $6.2 billion in federal student loan payments in May, June and July. Still, that’s a fraction of the outstanding $1.6 trillion U.S. student loan balance.
Student debt has exploded since 2004 with students now owing more than $1.3 trillion in loans.
These borrowers are enjoying the break. But it won’t last long. The program is set to end in January of next year at which time their normal payment schedule will resume.
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