Private student loan borrowers forgoing payments: Survey
A significant portion of private student loan borrowers are working with lenders to change their payments because of the financial fallout from the coronavirus pandemic.
More than a third of respondents with private student loan debt are suspending payments on these loans while 41% said they had agreed on reduced payments with their lender, according to the report by LendEDU, which was released on Tuesday.
Overall, respondents were concerned about being able to service their private and federal student loans. More than three-quarters of borrowers with private student debt were uncertain if they could have made their monthly payments on these loans before Congress passed legislation suspending payments on federal student loans, the report said.
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, suspended payments for both principal and interest on federal student loans through September. Although that didn’t include private loans, many of these lenders are also working with borrowers by reducing rates or making other accommodations in an effort stave off delinquencies.
Sixty-eight percent of all federal student loan borrowers feared they wouldn’t be able to make regular payments on these credits because of the effects of the coronavirus, and 54% said they couldn’t have made their next loan payment if Congress hadn’t implemented the grace period, the report said.
Despite the deferments, 41% of respondents with federal student loans plan on making payments while 43% will not.
The LendEDU survey, which was conducted on April 20, included 1,000 responses from American adults currently paying back federal student loans. Twenty-two percent of respondents had private student loans.