90 Percent of Student Loan Borrowers Say They're Not Ready to Restart Payments: Survey

Student loan forbearance is set to expire in September, but a vast majority of borrowers say they're not ready to start making payments again.

A new survey from the advocacy group Student Debt Crisis found that 9 in 10 borrowers are not prepared to start paying off their loans again on October 1. The organization surveyed more than 23,000 borrowers across the U.S. between June 17 and June 22.

Student Debt Crisis also found that the loan pause has been critical to the financial well-being of 75 percent of respondents.

In one of his first moves as president, Joe Biden extended loan forbearance for eight months. His executive order was a continuation of relief provided by the CARES Act passed in March 2020 that gave 42 million student loan borrowers a break from making payments and accruing interest during the coronavirus pandemic.

Now, the program is set to expire on September 30.

Nearly one-third of loan borrowers told Student Debt Crisis that more than one-third of their income will go toward paying off their debt starting on October 1.

Democrats are calling on Biden to extend the loan period again. NBC News reported Wednesday that a group of lawmakers sent a letter to Biden asking him to extend the pause until March 31, 2022, or until employment reaches pre-pandemic levels, whichever is longer.

Some lawmakers, including Senate Majority Leader Chuck Schumer (D-N.Y.), are also calling on Biden to cancel remaining student loan debt altogether.

"It's time for President Biden to #CancelStudentDebt," Senator Elizabeth Warren (D-Mass.) tweeted on Friday. "People need this. Our country needs this. And one of the best ways to create a 21st-century economy is by investing in people who have invested in their own education.

According to the survey from Student Debt Crisis, more than half of borrowers—52 percent—said they were more optimistic about their loan situation with Biden in office.

Earlier this month, the Department of Education announced it will forgive more than $500 million in student loan debt for 18,000 former students of ITT Technical Institute, a for-profit college chain that closed under the Obama administration.

The agency said ITT Tech made "repeated and significant misrepresentations" about its ability to help students get jobs and misled students about its ability to transfer course credit to other colleges.

"Our action today will give thousands of borrowers a fresh start and the relief they deserve," Education Secretary Miguel Cardona said in a statement. "Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending."

90% Student Loan Borrowers Not Ready Payments
A new survey from the advocacy group Student Debt Crisis found that 9 in 10 borrowers are not prepared to start paying off their loans again on October 1. Above, Senate Majority Leader Chuck Schumer (D-N.Y.) speaks during a press conference about student debt outside the U.S. Capitol on February 4, 2021, in Washington, D.C. Drew Angerer/Getty Images