Though the question of when the student loan payment plan would be unpaused was thrown for a loop this week people are still dealing with the financial pressures of owing money for education. After President Biden vetoed the bill that would block his $400 million student loan relief plan after the House voted to overturn it in May, it is still up to The Supreme Court for the final vote.
Even if this relief plan stays in limbo for the next few months, student loan payments are a palpable strain for much of the country including parents. To better understand the impact of student loans on individuals and families, Credello conducted a comprehensive survey on parents and student loans. The survey revealed some fascinating insights into the challenges faced by borrowers. According to Credello’s parents and student loans survey, a staggering 65% of parents expressed concerns about the long-term financial implications of their children’s student loan debt. Additionally, 42% of parents admitted that their children’s student loans had negatively affected their financial stability. These findings highlight the widespread impact of student loan debt on families and the urgency for effective solutions.
Key takeaways of Credello’s parents and student loans survey
- Out of the 600 parents surveyed who helped pay for their children’s education costs, 19% partially paid for their children’s student loans, and nearly 13% completely paid off the loans. Additionally, 34% of parents partly paid their children’s college tuition, while 34% completely paid it off.
- The survey revealed that nearly 30% of parents spent between $10,000 to $25,000 on their children’s tuition payments, and approximately 23% of respondents spent between $25,000 to $50,000 on tuition costs. These substantial expenses highlight the financial strain parents endure to support their children’s education.
- More than half of the parents surveyed (51%) experienced a decrease in their disposable income due to the financial responsibilities associated with their children’s education. This reduction in discretionary funds limits their ability to spend on non-essential items and experiences.
- The survey revealed that 38% of parents reported increased stress levels due to the financial obligations of supporting their children’s education. Juggling the costs of student loans or tuition payments alongside other financial responsibilities takes a toll on their overall well-being.
- Despite their financial strain, an overwhelming majority of parents (77%) expressed no regrets about providing financial assistance to their children. This highlights the deep-rooted desire to support their children’s educational pursuits, even at the expense of their financial stability.
- Surprisingly, only 9% of parents surveyed expect to be paid back in full by their children, while 17% anticipate partial repayment. This suggests that parents often view their contributions as an investment in their children’s future rather than a loan that needs to be repaid.
Will student loan payments resume
The decision to resume student loan payments comes after carefully evaluating borrowers’ economic conditions and overall financial well-being. While the temporary relief measures were crucial during the peak of the pandemic, policymakers have determined that it is now time to transition back to regular repayment schedules. This announcement has brought both relief and concern among borrowers, as many have grown accustomed to the financial flexibility provided by the temporary pause on payments.
In November the White House announced that student loan payments would resume 60 days after the Supreme Court made a decision on Biden’s student loan forgiveness plan which, as of last week, would have put the date sometime on August 30. However, now with the President’s veto The Supreme Court will decide by the end of this month. If they vote against it, it would cancel up to $10,000 in federal loans per borrower and up to $20,000 per borrower for those who received Pell Grants in college, which totals over $400 billion in outstanding student debt.
It is likely that the plan won’t stand up against the conservative Supreme Court which means payments could resume before the end of the year. Law Professor at Northeastern University Dan Urman is skeptical the plan will hold up against the conservative Supreme Court panel. In a recent interview he said, “Striking down forgiveness will add to growing skepticism that the conservative justices vote for conservatives, and the liberal justices vote for liberals.”
It is crucial for borrowers to review their repayment plans and ensure they are financially prepared. It is recommended to contact loan servicers and explore options for flexible repayment plans, loan consolidation, or refinancing. Seeking guidance from financial advisors and exploring resources provided by organizations like Credello can also help borrowers navigate the repayment process more effectively.
After a period of temporary relief due to the COVID-19 pandemic, borrowers must now prepare to resume their regular repayment plans. The insights from Credello’s parents and student loans survey shed light on the challenges faced by borrowers and the impact of student loan debt on families. Borrowers are advised to proactively explore available options to manage their student loan debt.