Despite Payment Freeze, Pandemic Worsened Financial Hardships for Millions in Student Debt
A college degree is more expensive than ever before. Student debt has long been labeled a crisis, but widespread economic difficulties brought on by the pandemic have only made things worse.
According to the U.S. Census Bureau, student loans are among the biggest contributors to household debt. The Department of Education estimated in 2017 that the total amount owed in federal student loans added up to $1.37 trillion; however, this amount has grown to nearly $1.6 trillion.
The Census Bureau’s Survey of Income and Program Participation showed that in 2017, 15% of adults (33 million) who had completed at least a high school degree had student loan debt. However, this number was even higher for non-Hispanic Black adults (21%), never-married adults (23%) and adults ages 25 to 34 (29%).
Student debt is also tied to the highest degree someone has received, noted the Census Bureau. In 2017, median annual earnings of those with some college but no degree was significantly less than those with a bachelor’s or higher. This makes it more challenging to pay off student debt.
The Census Bureau’s experimental Household Pulse Survey, which measured social and economic impacts during the coronavirus pandemic, has shown that the pandemic has only added more challenges to those in student debt, hitting some groups harder than others. The survey revealed that those with some college but no degree were more likely to have experienced a loss of employment income since the start of the pandemic. This same group also reported having a somewhat or very difficult time paying their usual expenses in the past week than those with at least a bachelor’s degree.
The government stepped in by freezing payments for federal student loans and setting interest rates to zero. These measures were all temporary, the U.S. Census Bureau mentioned, and student loan debt remains a heavy burden to millions of American households.
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Last updated: August 19, 2021