--- title: 'Federal Student Loan Borrowers Are in Financial Trouble Despite Paused Payments: NY Fed' description: Many federal student loan borrowers are struggling to pay their bills, even though student debt payments are paused, a new report finds. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 498 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Kaitlin Mulhere role: Editor url: https://money.com/author/kaitlin-mulhere/ bio: Kaitlin Mulhere has been covering the intersection of college and personal finance since 2015. She enjoys breaking down the complexities of college costs and financial aid, and she also runs Money’s Best Colleges. education: University of Florida at_money_since: 2015 articles: 217 covers: - Personal Finance - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Retirement - Shopping - Taxes social: - https://twitter.com/KMulhere - https://www.linkedin.com/in/kaitlin-mulhere-64503048/ published: '2023-01-06T18:23:15.000Z' modified: '2024-01-10T17:47:11.000Z' section: Personal Finance tags: - News - student debt - Student Loans word_count: 580 canonical: https://money.com/student-loan-borrowers-delinquent-payments/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![- [ ] News-Student-Loan-Borrowers-Financial-Trouble](https://img.money.com/2023/01/News-Student-Loan-Borrowers-Financial-Trouble.jpg) People who have federal student loans are disproportionately struggling to pay their other bills, even though their student loan payments have been paused since March 2020. Those borrowers would be in even deeper financial trouble when payments finally resume if President Joe Biden's [student loan forgiveness plan](https://money.com/student-loan-forgiveness-who-qualifies/) is blocked, a [study](https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1046.pdf) from the New York Federal Reserve suggests. Economists at the NY Fed analyzed the credit reports of borrowers with federal student loans and compared them with other types of student loan borrowers as well as folks with no student debt at all. They found that those who have student loans that are potentially eligible for Biden’s forgiveness plan are more likely than their peers to be behind on their credit card and auto loan debts right now. “These missed payments suggest that some federal student loan borrowers are having trouble meeting their monthly debt obligations even though student loan payments are not required,” the economists wrote. “We expect these delinquency patterns to worsen if federal student loan payments resume without relief.” For context, the typical monthly payment for student loan borrowers is approximately $222, according to a [separate study](https://www.federalreserve.gov/publications/2017-economic-well-being-of-us-households-in-2016-education-debt-loans.htm) from the Federal Reserve. Federal student loan borrowers have not been obligated to make those payments for the past 34 months. When payments resume later this year — assuming broad student loan forgiveness is struck down by the Supreme Court — borrowers who are already struggling would have to cope with the added burden of resumed payments that will likely total hundreds of dollars or more per month. The pause on federal student loan payments was [a lifeline for millions of borrowers](https://money.com/student-loan-payment-pause-borrowers-changed-budgets/) throughout the pandemic. Former President Donald Trump initially enacted the payment freeze, and it has since been extended eight times. The [latest extension to the payment pause](https://money.com/student-loan-payment-pause-extended-debt-relief-lawsuits/), made by the Biden Administration, is slated to expire later this summer after the Supreme Court rules on Biden’s student loan forgiveness plan. Currently, Biden’s plan to forgive up to $20,000 of debt per borrower is on hold due to legal challenges. The Supreme Court has agreed to hear the case, and oral arguments will start next month. A decision is expected by June. Regardless of the outcome, the payment pause will lift two months after the Supreme Court’s ruling. However, if Biden’s plan is cleared by the Supreme Court, mass delinquencies and defaults for student loan borrowers could be avoided, according to the study. The authors estimate that about $441 billion of student loan debt is eligible for discharge. For at least 16 million borrowers, that translates into total forgiveness of their outstanding student debt. “If the Biden Administration’s forgiveness plan is ultimately allowed to occur, it will mark the largest mass discharge of consumer debt in modern history,” the authors wrote. “Nearly forty percent of federal student loan borrowers would no longer have a balance, and millions more would have a smaller monthly payment when payments restart.” Even if Biden’s plan proceeds, the authors note that it's not a panacea, and the underlying issue of ballooning costs of attending college remains. “Amid rising tuition costs, student loan balances will resume their upward climb, leaving the challenge of financing higher education to the younger generations,” they wrote. “Absent direct policies to address this growing burden, taxpayers may be again called to for relief in the future.” ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/student-loan-borrowers-delinquent-payments/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Personal Finance", "item": "https://money.com/personal-finance/" }, { "@type": "ListItem", "position": 3, "name": "Student Loan Debt", "item": "https://money.com/student-loan-debt/" }, { "@type": "ListItem", "position": 4, "name": "Federal Student Loan Borrowers Are in Financial Trouble Despite Paused Payments: NY Fed" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/student-loan-borrowers-delinquent-payments/#webpage", "url": "https://money.com/student-loan-borrowers-delinquent-payments/", "name": "Federal Student Loan Borrowers Are in Financial Trouble Despite Paused Payments: NY Fed", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-01-06T18:23:15.000Z", "mainEntity": { "@id": "https://money.com/student-loan-borrowers-delinquent-payments/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/student-loan-borrowers-delinquent-payments/#breadcrumb" }, "dateModified": "2024-01-10T17:47:11.000Z" }, { "@type": "NewsArticle", "headline": "Federal Student Loan Borrowers Are in Financial Trouble Despite Paused Payments: NY Fed", "articleSection": "Personal Finance", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/01/News-Student-Loan-Borrowers-Financial-Trouble.jpg", "width": 2880, "height": 1920, "caption": "News-Student-Loan-Borrowers-Financial-Trouble" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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