New study shows federal government’s student loan relief efforts have been effective in helping most borrowers return to feeling financially secure.‍

WASHINGTON, DC (August 5, 2021) — After extensive relief efforts by the federal government in March 2020 to provide support to student loan borrowers and the broader economy, a new study suggests that a substantial majority of borrowers now feel their financial stability is equal to or greater than it was before the government’s actions. The study, conducted by YouGov in collaboration with the American Fintech Council (AFC), found that a plurality of borrowers now feels more secure in their jobs, financially stable, and optimistic about future economic conditions:

Nearly two-thirds of student borrowers – meaning those with student loans (64%) – feel equally or more financially stable now than they were in March 2020, including a sizable plurality (35%) who report feeling more financially stable today.

• 85% of employed student loan borrowers feel their employment is just as secure (44%) or more secure now (41%) compared to March of 2020, including 22% that feel their employment is now much more secure.
• About 3-in-4 student borrowers (74%) expect their financial situation to get better over the next 12 months (40%) or remain the same (34%).
• Nearly 7-in-10 student borrowers (69%) say their income has increased (31%) or remained the same (37%), while just 22% of borrowers have experienced declines in income.

In March 2020 the White House and the Congress took aggressive and much-need action to address the growing public health and economic crises – including executive actions and the CARES Act.  Those actions provided significant relief to federal student loan borrowers – including the suspension of monthly principal and interest payments for all federal student loan borrowers regardless of income.  Fortunately, as this study shows many student loan borrowers have returned to or even exceeded their March 2020 financial condition.

“The federal student loan relief initiated sixteen months ago has been invaluable to Americans navigating unprecedented economic and personal turmoil.  This survey shows that the financial outlook of a significant majority of borrowers has rebounded alongside the broader economic recovery.” said AFC CEO Garry Reeder. “As these borrowers return to normal, we need to pivot from the wide-ranging relief of the past to a more focused and compassionate program to service and support distressed borrowers. Fortunately, the Department of Education oversees programs specifically designed to serve borrowers in need.”

A full summary of key findings from the survey show:

Employed student loan borrowers feel their employment is now as or more secure.

• A large majority (85%) of employed student loan borrowers feel just as secure (44%) or more secure (41%) in their employment compared to March of 2020, including 22% who report feeling “much more secure.”
• Just 1-in-10 employed borrowers (10%) say their current employment is less secure now compared to March 2020.

Borrowers feel as or more financially stable and are optimistic about future economic conditions.

• Over two-thirds of student borrowers (64%) feel equally or more financially stable now than they were in March 2020, including a sizable plurality (35%) who report feeling more financially stable today than in March 2020.
• By contrast, only about one-quarter of borrowers (27%) report being less financially stable than they were before the pandemic-induced recession.
• Nearly 3-in-4 student borrowers (74%) expect their financial situation to get better over the next 12 months (40%) or remain the same (34%).
• Just 13% of student loan borrowers expect their financial situation to get worse.

Across various aspects of personal finances – like income, spending, savings, and investments – student loan borrowers were more likely to see their circumstances stay the same or improve.

• Nearly 7-in-10 student borrowers (68%) say their income has increased (31%) or remained the same (37%), while just 22% of borrowers have experienced declines in income.
• Only 11% of borrowers report decreases in investments, while more than 4 times as many borrowers (46%) say their investment have increased (20%) or remained the same (26%).
• Just 22% of borrowers have decreased spending while 62% of student borrowers have increased (27%) or kept spending the same (35%).
• 57% of borrowers say their savings has increased (28%) or stayed the same (29%), while just 26% say their savings has decreased.

Some borrowers are feeling confident enough to make major purchases for the first time.

• More than 1-in-10 student loan borrowers bought a house or other real estate (16%), stock and/or bonds (19%), or a car (23%) for the first time over the last 16 months.
• Student loan borrowers were generally more likely than US Adults overall to make major first-time purchases, like real estate (16% vs. 8%), financial assets (19% vs. 11%), or a car (23% vs. 14%).‍

Methodology‍

YouGov conducted an online survey on behalf of the American Fintech Council among a nationally representative sample of n=2,665 adults, including n=460 student loan borrowers. Fieldwork was executed from July 22nd through July 26th, 2021. All figures, unless otherwise stated, are from YouGov Plc. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). Full results of the survey are available here.