Half of student borrowers said they will not earn enough to make payments on their student loans when they resume in October after a three-year pause, according to a recent survey.
The survey, conducted by Life and My Finances, found that among borrowers set to resume payments this fall, only 22 percent have planned how they would make them.
The survey measured the responses of 1,127 people with student loan debt.
Among 50 percent of survey respondents who said they could not afford to make student loan payments on their current income, close to 20 percent said someone might loan them the money, while others said they would cut their retirement contributions.
About 6 percent of borrowers surveyed said they would not make payments.
Close to two-thirds of those surveyed have a student loan balance of $20,000 or less, and more than a quarter owe between $20,001 and $60,000. Ten percent of survey respondents owe more than $60,000.
Still, the survey found about 6 percent of borrowers surveyed are heading toward default.
During an on-ramp period announced by the Biden administration after the Supreme Court struck down the president’s student debt forgiveness plan, borrowers who miss payments between October 2023 and September 2024 will do so without risking default or hurting their credit.
Nearly all borrowers in the survey believe the federal government should forgive at least a portion of student loans owed by more than 40 million people.
And separate polling from Intelligent.com shows that some who expected at least partial loan forgiveness to survive the Supreme Court spent extra money before the court’s June decision.
More than a third of student loan borrowers spent money they otherwise would not have when they believed a portion of their debt would be forgiven by the Biden administration, the poll found.
Most polled were confident they would receive some student debt relief as part of the Biden administration’s plan to forgive at least $10,000 for federal borrowers and up to $20,000 for those who received a federal Pell Grant while in school.
Borrowers said they used the extra money to cover a range of expenses, though 37 percent said they paid off other debts. Others used the funds on home repairs and rent payments.