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Sarah Sitzler worked all the way through college, but her income was never enough to afford rent in New York City. Despite receiving scholarships and grants, Sarah was faced with paying for an expensive school in an expensive city—Fordham University, a private school whose undergraduate cost of attendance ranges from $54,393 to $72,903 per year. Almost 10 years after graduating, Sitzler has hardly been able to pay off more than the interest on her student loans.
“Even if I somehow used all of my savings and put it onto the balance, it doesn’t make a significant difference,” Sitzler told The Nation. When the pandemic hit and Sitzler could no longer find work, even the minimum monthly payment was out of the question. “With the amount of money I’m saving now, it’s insane to put it on my loans,” she said.
Sitzler’s story is only one of thousands. Across the country, student loan borrowers say that Covid-19 relief is proving drastically insufficient.
According to a recent survey of over 38,000 student loan borrowers launched by the Student Debt Crisis, a nonprofit working on behalf of borrowers, and technology start-up Savi, more student loan borrowers say that the relief bill, which ultimately received bipartisan support in Congress, did not improve their financial situation than say it did.
“I am grateful that the government has done this,” Sitzler told The Nation. “But it only goes until September, and none of my money is going to my loans at all right now.” Sitzler, who said she receives most of her income working on film sets, doesn’t expect to be at full employment when federal relief ends. For now, her energy is focused on the rent strikes, which are picking up in New York, and other financial needs. “I’m focusing on just having a safety net, keeping a safety net, and being able to eventually pay rent,” she said. “Paying off my student loans right now is not even a priority.”
Student loan debt in the United States is at the highest it’s ever been, reaching $1.6 trillion this year. Just between 2017 and 2018, average student loan debt at the time of graduation increased from $28,650 to $29,200, according to the Institute for College Access & Success. Students who earn a graduate degree can have an even harder time paying it back, despite potentially earning a higher salary: 51 percent of overall student debt in 2016 was shouldered by households with at least one advanced degree.
“It’s a class thing,” Donaldo Prescod, graduate of San Francisco State University’s Cinema Studies masters program and New York resident, told The Nation. “Whoever’s rich in that situation is benefiting.” He added that the CARES Act, and even the Democrat-backed HEROES Act that passed in the House, are only Band-Aids—they delay debt rather than shrinking it. When it comes to student loan debt, many borrowers feel that neither major political party actually wants to help.
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Under the CARES Act, federal student loans fall under an automatic administrative forbearance that temporarily pauses payments and interest until September 30. The law also pauses debt collections against defaulted borrowers for the same six-month period. Some private loan servicers have independently offered relief as well, though in most cases the borrower must know this relief exists and directly request the assistance.
Meanwhile, 36 percent of federal student loan borrowers who responded to the survey were not aware of the loan relief in the CARES Act; 40 percent didn’t know the pause was automatically applied. Even worse, 80 percent were unaware of the private loan relief available, meaning that a large segment of the population that could get relief for private loans is likely not calling to request it. And 59 percent of respondents said they are facing increased stress, anxiety, and depression due to their student loans during Covid-19.
While all student loan borrowers struggle, the data suggests this financial system is exacerbating preexistent economic disparities, too.
According to the survey, essential workers are currently some of the worst-affected, with 59 percent owing more than $50,000 in student loans and 31 percent owing over $100,000. And a startling 91 percent of essential workers, the vast majority in the health care field, expect to struggle to make their student loan payments in six months when the relief ends. For Jessica Nguyen, who develops fragrances for a perfume wholesaler’s in-house design studio that has shifted to making hand sanitizer during the pandemic, the lack of special relief for essential workers is appalling. “We’re the sacrificial lambs,” she said. “Yes, I’m working—but at what cost, if I have to seek out medical treatment?”
Additionally, according to research from the Brookings Institute, Black student loan borrowers in the United States already owe on average $7,400 more in student loans than white borrowers by the time they receive their undergraduate degree—indeed, 80 percent of Black students take on student loans compared to 60 percent of white students. Within four years of graduating, Black alumni tend to have twice as much student loan debt as their white counterparts. Latinx borrowers, despite graduating with a similar amount of debt as white borrowers, default at twice the rate. And according to the Center for American Progress, Native American borrowers default at a higher rate than any other racial group—as much as 40 percent of the time.
According to the survey from Student Debt Crisis, the financial impacts of the pandemic are only exacerbating these inequities for borrowers. Respondents across races reported experiencing food insecurity as a result of their student loan payments, but for Latinx borrowers that number was 6 percent higher than for their white counterparts. The rate of African American and Latinx respondents missing a rent or mortgage payment because of their loans was 5 percent higher than white respondents’.
Prescod, who is Panamanian-American, said these trends arise mainly out of differences in access to financial education. “In Black and brown communities, the education about managing money is very absent,” he said. Donaldo says that when growing up in Salinas, a 77 percent Latinx city, financial education was noticeably sparse. And it leaves him wondering, “How come this stuff isn’t taught in a way that also lets me play a part in and compete in it?”
And there’s also an often-unseen facet of the student debt crisis: adults who return to school or otherwise still hold student loan debt in their 40s, 50s, and 60s. Only 7 percent of people between 45 and 59 have student loan debt, and only 1 percent of Americans over the age of 60. Though fewer, older borrowers fare worse in terms of financial precarity, education, and awareness, and mental health. Fifty percent of borrowers over the age of 46 report bankruptcy or having to close a small business at least partly because of student loan debt. Six percent of borrowers over 65 also say they have had their Social Security benefits garnished because of debt after the CARES Act was passed, though the bill supposedly prohibits this from happening.
“There’s more existential worry,” said Jesse Baker, who holds a PhD from the University of California, Irvine, and has refused to pay his student loan payments in protest. He is 51. “I watch my parents going through this…and it’s like, ‘Oh my God, am I going to have enough money left to pay for my rent and food?’”
Borrowers over the age of 45 reported having significantly less information about student loan payment relief in the CARES Act than their younger counterparts, too. As many as one in four did not think that federal student loans were suspended for six months, while 22 percent didn’t know that the suspension was applied automatically. “You’re trying to navigate your income options, and then it’s, ‘How am I going to figure out my rent? Are my parents going to die?’” Baker said. “Life is falling apart, and now I have student loans?”
The partnership’s survey received over 38,800 responses—more than three times as many as Student Debt Crisis’s previous, and most successful, survey. Nearly nine in 10 survey respondents support some kind of debt cancellation. For Jesse Baker, his support of debt cancellation started in response to the financial crisis of 2008. He said he wonders why student loan borrowers can’t receive as much relief as major financial institutions. “I’ll take the deal the banks got,” he told The Nation. “Until we get to that, I’m not interested.” Donaldo also said that the relief given to banks versus borrowers is wrong, though he said he doesn’t know to whom he should direct his complaints. “If they’ve shown they can lower the interest rate, who is benefiting by keeping us trapped?” he said.
Student Debt Crisis has repeatedly called for student debt forgiveness, most recently through an ongoing petition with over 37,000 signatures. Natalia Abrams, executive director of Student Debt Crisis, said the data “shows that many people with federal student loans are facing a financial disaster when relief ends.”
“Delaying doesn’t do anything,” said Prescod. For him, crafting a stimulus plan that relieves student loan borrowers from trillions of dollars of debt and stimulates the economy is simple: erase the $1.6 trillion of American student loan debt. “Canceling student debt—that’s what would take the burden off of so many people’s backs.”
