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In March of 2020, student loan payments were paused in response to the large-scale economic shutdown caused by the COVID-19 pandemic. This pause has been extended six times and the moratorium on student loan payments and interests is set to expire on August 31, 2022.
The Federal Reserve recently revealed that almost 60% of borrowers who qualified for forbearance did not make a single payment from August 2020 through December 2021. Many borrowers will not be able to resume paying their student loans, likely leading to defaulting on their loan repayments once the moratorium is lifted due to strained budgets.
As of April 2022, student loan debt in the U.S. totaled $1.75 trillion, with about 1 in 8 Americans carrying some student debt. The average U.S. household saddled with student loan debt owes $57,520, according to NerdWallet’s 2020 household debt survey. In 2021, student loan borrowers’ debt balances are higher, as well as delinquency rates on credit cards, mortgages, and auto loans.
Reports indicate that the Biden administration is considering erasing $10,000 in federal student loan debt for all borrowers who earn less than $150,000. However, no decisions have been made yet.
As payments prepare to resume, employers can consider how to help employees and earn their long-term loyalty. Offering benefits such as a student loan repayment could give employers a competitive edge. Download the bulletin for more details.
National Insurance Services offers a Student Loan Solutions program for school district customers who meet specific parameters. This plan can provide student loan debt and forgiveness assistance for public school employees. Contact your NIS Representative for more details.
This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.
National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.
