On Nov. 26, CFPB analyzed student loan return to repayment data.
CFPB issued analysis of the first 7 months of federal student loan return to repayment.
Covid multi-year pause on federal student loan interest, payments ended Sep. 2023.
Used credit record data to evaluate how borrowers fared after returning to repayment.
Borrowers are experiencing financial stress despite increased availability of IDR plans.
Report Data
Report found that around 40% of borrowers successfully made payments in Apr. 2024.
Approximately 20% of borrowers had scheduled payment of $0 as of Ap. 2024, about double the share of borrowers before payment pause as use of IDR plans increased.
30% of borrowers missed their payments in Ap. 2024, which is similar to share (27%) of borrowers in repayment who missed most recent payment before payment pause.
Additionally, nearly 8.9 million borrowers appear to have benefitted at least once from the on-ramp policy as 28 million borrowers returned to repayment all at once.
47% of student borrowers entering repayment for 1st time are not actively repaying.
21% of borrowers new to repayment successfully made their payments in Apr. 2024.
Delinquencies on non-student loan debts were higher at the end of pause than before.
Borrowers in low-income areas remain more likely to struggle to repay student loans.
Analysis Findings
Student loan borrowers experienced financial stress despite increased plan availability.
Increased card utilization rates and delinquencies on non-student loan accounts in months before repayment restarted show borrowers struggled before loan pays began.
Millions more borrowers could likely benefit from the reduced or $0 payments offered by IDR plans but may be experiencing problems in successfully accessing these plans.
Due to long servicer call wait times and problems with IDR application processing.
Similarities between borrowers who have $0 scheduled payments and borrowers who have missed payments suggest expanded $0 payments may help some borrowers;
Stay out of delinquency on student loans or avoid increasing their use of other debts.
