Few Student Loan Borrows Are Making Payments During Pandemic
October 7, 2020
As part of the response to the coronavirus, the Federal Government put all federal student loans into forbearance, meaning that borrowers could pause making loan payments without any penalty or further interest accrual. Very few borrowers have continued to make payments.
Less than 11% of people with federal student loans have continued to make payments during the pandemic, according to an analysis by an expert in higher education who spoke to CNBC. This means that just 4.6 million of the 42 million Americans with federal student loans have made a payment since March.
While this has freed up money for covering basic expenses and helped borrowers who have faced job loss, experts have recommended that borrowers continue to make payments if they can. Payments made during a period where interest is paused means they may be able to pay down the principal, lowering the total cost of the loan.