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Student loan borrowers are struggling to make repayments

The Department of Education estimates 43 million people in the U.S. owe a collective $1.6 trillion in federal student loan debt.
Posted at 3:28 PM, Dec 27, 2023

As the end of 2023 approaches, millions of federal student loan borrowers are getting a better idea of what their finances look like, after having made months of repayments for the first time since 2020.

Among them is Darliah Adams, who was so concerned about her federal student loan payments restarting on Oct. 1 that the mother of one from Birmingham, Alabama, recently took on a second job.

Adams is among the millions of people in the U.S. who have some kind of federal student loan debt.

"Every month it's hard for us; you're barely making enough working," she said.

Adams is not shy about her concerns or current financial situation. The 27-year-old owes $38,000 in federal student loans and her new monthly payment will be around $530 a month. The customer service representative takes home around $1,500 a month, meaning she's had little money left over once she pays the bills and buys groceries.

"And there's no help so it's like we're drowning in debt," she said. "With not only student loans but everything else, and there's no way to catch up."

The Department of Education estimates 43 million people in this country owe a collective $1.6 trillion in federal student loan debt.

60% of borrowers have made payments on their restarted student loans
College graduates

60% of borrowers have made payments on their restarted student loans

The Education Department says a lot of borrowers will likely need more time to get on board with repayment.


Federal student loan repayments have been paused for so long in this country that there are nearly three graduating classes of college students who have never had to manage their finances while paying those student loan bills. It's one of the many reasons financial experts have been watching closely as repayments restarted this year.

"We've had three and a half years of not paying. We're very used to not paying our student loans," said Nick Wolny, a senior editor at CNET Money.

Wolny's biggest concern for the economy is that come the start of 2024, holiday credit card spending and student loan repayments will collide.

"Credit card debt keeps going up and up and up and economists are putting out that there has to be a point where consumers have too much debt and will have to pull back to take care of that," he added.

Three months after student loan payments restarted, many borrowers are still waiting to hear how much their repayment amounts will be as millions of applications are being processed by loan servicing agencies. And earlier this month a pair of student loan borrowers sued the Missouri Higher Education Loans Authority or MOHELA – alleging they've been mismanaging student loan forgiveness plans.

"This holiday season will really be a test for a lot of people as they have one more ball to juggle," he said.

To help borrowers who are struggling, the Biden administration rolled out the SAVE plan, a new income-driven repayment plan to help borrowers plan for upcoming payments.

Borrowers can use forbearance to delay payments for up to a year without their credit being impacted, but interest is still accruing.

"The biggest piece of advice is it is a debt, you owe that debt, make it work in your budget rather than just punting and punting again and again," Wolny said.