July 28, 2022
Inside Higher Ed covered a recent New America Report on Student Loan Borrowers authored by Sarah Sattelmeyer.
Before the nationwide pause on federal student loan payments, one-third of the nation’s nearly 43.4 million borrowers in repayment before the start of the pandemic had defaulted at some point. Of those borrowers, 46 percent were Black. Default is common, but little is known about the experiences of these borrowers who enter default.
A new study released by New America Wednesday provides a snapshot into the realities of student loan default. Default is when a borrower misses 270 days of payments and is punished with financial penalties like high collection fees, having their tax refunds garnished and the possibility to have federal benefits withheld.
Default disproportionately impacts low-income, low-wealth and Black, Latino and Native American borrowers. These groups have also been hit the hardest by financial hardship from the COVID-19 pandemic and could be at the highest risk to enter default once repayment begins again.
Read the full article here.