20% of Student Loan Borrowers Making No Payments: Study

A new study released by Intuit Credit Karma reveals that a large majority of individuals with student loans have not made any payments following the end of the pandemic moratorium and many are worried about their financial stability going forward. Why it matters: As the student loan repayment landscape evolves, debt collectors and financial institutions need to understand borrower challenges to develop effective collection strategies and support financial wellness initiatives. By the numbers: The big picture: Affordability issues, largely driven by the high cost of living, are forcing borrowers to make difficult financial trade-offs and depleting their savings. Zoom in: Between the lines: The SAVE plan, intended to assist federal borrowers, has faced challenges: What’s next: The 12-month “on-ramp” repayment period for federal loans expires on September 30, 2024, potentially impacting borrowers’ credit scores. The bottom line: Student loan debt continues to hinder financial progress for many Americans, with 60% saying it prevents them from reaching savings goals or paying off other debt. What to watch: As the SAVE plan’s future remains uncertain and the “on-ramp” period ends, debt collectors should prepare for potential increases in delinquencies and develop strategies to assist borrowers in managing their debt obligations. Learn more.