53% of student loan borrowers say their financial stability relies on debt forgiveness
The Supreme Court will hear oral arguments at the end of this month ahead of its final decision on President Joe Biden's plan to forgive up to $20,000 in student debt for federal loan borrowers. Legal scholars and court experts have varying opinions on how the justices will handle the two lawsuits blocking Biden's plan, but the majority of borrowers are sure of one thing: Their debt is standing between them and financial wellbeing. In fact, 53% of federal student loan borrowers say their financial stability relies on their loans being forgiven, according to a recent Credit Karma survey of 1,009 adults in the U.S. The summer will be here before you know it and with it, the return of student loan payments on or around June 30. But for struggling borrowers, adding those payments back into their budget won't be easy.

Payment pause has been a reprieve, not a long-term solution

Next month marks three years since federal student loan borrowers were last required to make a payment on their loans, thanks to the pandemic forbearance that began under former President Donald Trump. Borrowers who were able to stay on top of payments had a choice to continue making payments to expedite their debt payoff or take advantage of the pause and use the funds they would have put toward their debt for other things. Some borrowers were able to have weddings, start a business or achieve other financial goals. For the most part, borrowers say the payment pause has allowed them to feel more secure about their money, but that security may end when payments resume. Over half (56%) of survey respondents say their financial stability relies on not being required to make payments. While they might be more financially stable, more than 1 in 4 borrowers say they haven't been able to save while payments have been paused because the money they would have paid on their student loans is now going to other necessities. With or without student debt, the last year has been financially difficult for many Americans as record-high inflation sent prices up on nearly everything from rent to eggs. Nearly 70% of respondents say their finances stayed the same or declined since last year, Credit Karma reports. A recent Gallup poll found similar results: Half of Americans report their finances are worse off now compared to a year ago.

What comes next for borrowers