New Data Shows COVID-19 and Economic Downturn Crushing Student Loan Borrowers

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BySavi

5 min readMay 21, 2020

Savi, a social impact technology startup working to help solve the student loan crisis, and Student Debt Crisis, the nation’s leading grassroots powered student debt advocacy organization, recently released findings from a national poll of 38,802 student loan borrowers across America finds that many are still struggling during COVID-19, even after relief efforts. The two conducted the poll to better understand the impact of student debt during the COVID-19 pandemic and to collect feedback on borrower experiences.

Student Debt & COVID-19 Survey: Key Findings from 38,802 Responses

33% of federal student loan borrowers were already struggling to afford their payments before COVID-19; that number increases to 46% of people who expect to struggle in 6 months after federal relief is scheduled to end.
36% of federal student loan borrowers were not aware there was COVID-19 relief, and 40% didn’t know the federal COVID-19 relief was automatically applied.
More federal loan borrowers disagree that COVID-19 relief improved their financial situation than those who agree.
80% of private loan borrowers are unaware that COVID-19 relief exists for private loans.
70% of private loan borrowers are not receiving any relief from their loan company.
59% of respondents are facing increased stress, anxiety, and depression caused by their student loans during the COVID-19 pandemic.
89% of federal loan borrowers support some form of cancellation.
37% of respondents are Healthcare or Social Assistance workers.
7,955 of 38,802 respondents have had their hours reduced, lost their job, or been furloughed

“We are blown away by the immense response to our Student Debt and COVID-19 survey. Despite the great confusion, frustration, and economic harm facing student loan borrowers today, over 38,800 people shared their experience with us — that’s a 385% increase compared to our most successful previous survey. Even during a national crisis, people with student debt remain vocal and committed to helping advocates better understand their challenges and policy failures,” said Natalia Abrams, Executive Director of Student Debt Crisis. “This data shows that many people with federal student loans are facing a financial disaster when relief ends. It reminds us there are glaring outcome disparities for borrowers who are older or who are black or brown. And, sadly, it documents the student debt crisis facing essential workers and healthcare professionals.
“Student loan relief only works if borrowers know it exists and understand the rules. COVID-19 has only increased the burden of student loans, yet 1 out of 3 borrowers do not even know about the student relief passed by Congress. Borrowers need education and better tools to help reduce their debt,” said Aaron Smith, co-founder of Savi. “We believe technology is one important part of the solution to making student loans simpler and more stress-free.”

Additional Survey Findings

Impact of student loans by age: Student loans and COVID-19 are hurting all Americans, but the impact is even greater for older Americans

Student loan borrowers over the age of 46 were 50% more likely than borrowers age 18–45 to report that student loan debt contributed to bankruptcy or closing a small business.
67% of student loan borrowers over age 65 reported greater anxiety and depression due to their student loans, it was 55% for other age groups.
6% of student loan borrowers over age 65 reported having their social security benefits garnished post-COVID, despite the fact that the Department of Education was supposed to pause social security garnishments.

In terms of education and awareness, student loan borrowers over age 45 consistently had less information or wrong information about new student loan relief provided by the CARES Act:

33% of borrowers over age 45 said that they were not aware of federal student loan relief, compared to 30% for borrowers under age 45.
25% of borrowers over age 45 incorrectly stated that federal loans were NOT suspended for 6 months, compared to just 19% for borrowers under age 45.
22% of borrowers over age 45 incorrectly stated that federal student loan relief is NOT applied automatically, compared to 18% for borrowers under age 45 .

Impact of Student Loans by Race: Borrowers of color are less aware of COVID-19 relief while also facing more difficulty affording necessities like food and housing.

More than 24% of African Americans did not know that their federally-held student loan payments are paused for 6 months, compared to less than 19% of Whites.
More than 60% of White Americans are facing higher levels of anxiety, depression or stress as a result of their student loan payments, compared to more than 11% of African Americans and Latinx Americans.
More than 22% of Latinx Americans are experiencing food insecurity as a result of their student loan payments, compared to over 17% of African Americans and 16% of White Americans.
More than 11% of African Americans and Latinx Americans missed a rent or mortgage payment as a result of their student loan payments, compared to just 6.5% of White Americans.

Impact of Student Loans on Essential Workers: Frontline workers are burdened with high student loan totals and are concerned they will not be able to afford their payments when federal relief is scheduled to end.

More than 42% of Essential Workers expect to not be able to pay their student loans at all 6 months from now; 49% of Essential Workers expect to struggle to pay their student loans in 6 months from now. In total, 91% of Essential Workers expect to either be unable to pay or struggle to pay their student loans in 6 months from now.
36% of Essential Workers were not aware that there was COVID-19 relief for federal student loans.
19% of the respondents said they were in “Educational Services” industry

Impact of Student Loans on Health Care Workers: Healthcare workers have high student loan totals and a majority of them are facing income and employment disruption.

53% of the respondents who work in the healthcare industry have had their hours reduced, lost their job, or been furloughed.
More than 21% of Health Care workers with over $100,000 in student loans, make less than $50,000 per year.
More than 38% of Health Care workers have over $100,000 in student loans and more than 14% of Health Care workers have over $200,000 in student loans.
37% of the respondents who provided occupation said they were in “Health Care and Social Assistance” industry
More than 57% of essential workers surveyed work in health care, and more than 80% of healthcare workers surveyed are essential employees.

Methodology

This survey was conducted by advocacy organization Student Debt Crisis and social-impact startup Savi. It received 38,802 respondents from all 50 states from May 8, 2020, through May 19, 2020. The objective of this survey was to better understand the impact of student debt during the COVID-19 pandemic and to collect feedback on borrower experiences. The 46-question survey was distributed online to a database of Student Debt Crisis followers that includes approximately 1.3 million people.

Originally published at https://studentdebtcrisis.org on May 21, 2020.