1 in 10 Student Loan Borrowers Skipping Repayments out of Protest: Survey

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Roughly 1 in 10 borrowers with existing student loans are refusing to pay them back as part of an intentional boycott aimed at pressuring the government into completely wiping out federal student loan debt, according to the findings of a new survey.

The survey was conducted by online magazine Intelligent.com in January among 1,000 federal student loan borrowers, and the age of respondents was balanced to reflect the demographics of student loan borrowers.

The survey was aimed at finding out how borrowers are coping with the resumption of student loan payments and collections roughly three months after the pause on federal student loan repayments came to an end following a debt-ceiling deal that prohibited President Joe Biden from extending it further.

The federal government, under the Trump administration, paused student loan repayments in 2020 amid the COVID-19 pandemic in an effort to ease the financial burden on Americans.

That pause was extended multiple times under both the Trump and Biden administrations despite concerns that doing so could have significant implications on the wider economy and burden taxpayers.

Survey results show that since the federal student loan payment pause ended in October 2023, just 40 percent of borrowers have made all their monthly student loan payments, 35 percent have made some payments, and 25 percent haven’t made a single payment.

Borrowers Boycotting Repayments

Furthermore, 9 percent of borrowers who haven’t made any payments said they are intentionally boycotting to pressure the government into canceling federal student loan debt. Nearly 70 percent of borrowers said they haven’t yet resumed repayments because they are unable to afford it, however.

Among the borrowers taking part in the student loan repayments boycott, 44 percent told Intelligent.com that they believe not making repayments will result in the government canceling some federal student loan debt.

Approximately 28 percent said they believe it’s “likely” the boycott will lead the federal government to cancel all federal student loan debt.

Meanwhile, 64 percent said they believe it’s “highly likely” (32 percent) or “somewhat likely” (18%) that a boycott will help “elect political candidates that believe in loan forgiveness.”

The survey findings come after the Supreme Court struck down President Joe Biden’s loan forgiveness plan in 2021.

Under that plan, the government would have canceled up to $20,000 in debt per student. Critics had argued the debt relief initiative would be unfair to Americans who had already worked hard to pay off their student loans or to those who never took out student loans and were effectively forced to foot the bill for those who did.

Supreme Court Rules on Biden Debt Relief Initiative

Republican lawmakers also contested that the debt relief initiative, which came at a time of soaring inflation, was illegal and could not be rolled out without authorization from Congress.

Undeterred by the Supreme Court’s ruling, however, President Biden has vowed to reduce student loan debt, and the White House has announced a series of smaller initiatives, including fast-tracking a provision under the “Saving on a Valuable Education” plan, also known as SAVE, that was initially scheduled to take effect this summer.

According to a Jan. 12 press release from the White House, borrowers enrolled in SAVE who took out initial loans of less than $12,000 and have made payments for the past 10 years will have their remaining debt automatically canceled beginning in February.

So far, the Biden administration has forgiven $132 billion of student loan debt to over 3.6 million borrowers.

“Although the frustration behind the student loan boycott is understandable, it’s unlikely to lead to positive change,” said Jake Hill, founder and CEO of consumer debt firm DebtHammer, in a press release.

“Instead, it will destroy the credit scores of those who choose to participate. This may not seem like a major issue in the short term, but failing to pay your student loans can make it more difficult to obtain funding for future purchases. For example, if you default on your student loans, you’ll be unable to obtain most mortgages, which will derail any plans you have to purchase a home,” Mr. Hill added.

Tom Ozimek contributed to this report.