Forty percent of student loan borrowers missed their first student loan payments since they were paused for three years due to the COVID-19 pandemic, the Department of Education said Friday.
In a blog post, U.S. Undersecretary of Education James Kvaal said 60 percent of student loan borrowers whose payments were due in October made them by mid-November. He said 22 million people had payments due in October, and over 4 million owed payments for the “first time.”
“While most borrowers have already made their first payment, others will need more time. Some are confused or overwhelmed about their options,” Kvall said. ”We want to make sure borrowers know that our top priority is to support student loan borrowers as they return to repayment.”
Student loan payments resumed on Oct. 1. As they restart, the Biden administration has offered an “on-ramp” repayment program through October of next year, which does not intensely penalize borrowers if they miss payments.
“To give borrowers breathing room while they work student loan payments back into their monthly budgets, we created the 12-month on-ramp period,” Kvall said in the blog post. “Until next September, borrowers will be protected from the harshest consequences of missed payments, such as delinquency, default, and mandatory collections.”
Last week, President Biden announced $4.8 billion in student loan forgiveness for federal borrowers who work in public service fields. Approximately of those eligible borrowers should have already qualified for the already-existing public service loan forgiveness program, but had not yet received it due to clerical errors.
“From Day One of my Administration, I vowed to improve the student loan system so that a higher education provides Americans with opportunity and prosperity – not unmanageable burdens of student loan debt,” Biden said in a statement. “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”