The pandemic-era pause on paying student loans ended in October, but some are refusing to pay in protest.
An Intelligent.com poll of 1,000 federal student loan borrowers conducted this month found 25 percent haven’t made any payments at all. While the majority of those who have shirked their financial responsibilities (69 percent) say they’ve done so because they cannot afford it, 9 percent are boycotting in order to pressure the Biden administration to bail them out. Another 18 percent of those who haven’t made any payments yet said they’d restart in September once they begin “facing severe consequences” for skipped payments.
In an August 2023 survey conducted by Intelligent.com, 49% of borrowers said they were aware of calls for a student loan repayment boycott when the payment pause ended. At that time, 62% of borrowers who knew about the boycott movement said they were ‘highly likely’ (26%) or ‘somewhat likely’ (36%) to participate.
Among those currently boycotting student loan repayments, 44% believe their protest will lead to the cancellation of some federal student loan debt. Twenty-eight think it’s likely the boycott will lead the federal government to cancel all federal student loan debt.
The majority of boycotting borrowers, 86%, say it’s ‘very’ (45%) or ‘somewhat likely’ (41%) that their efforts will bring attention to the student loan debt conversation. Sixty-four percent say it’s ‘highly’ (32%) or ‘somewhat likely’ (18%) that a boycott will help elect political candidates that believe in loan forgiveness.
However, according to financial experts, missing student loan payments for any reason may have more negative consequences for borrowers.
“Although the frustration behind the student loan boycott is understandable, it’s unlikely to lead to positive change,” says Jake Hill, founder and CEO of DebtHammer. “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.” (Intelligent.com)
Less than half of student loan borrowers, 40 percent, said they’ve been able to make all their monthly payments, while 35 percent have made some payments.