Borrowers who qualified for Biden's loan forgiveness plan–which has since been rejected by the Supreme Court–have spent money on other debts, retail
SEATTLE, July 20, 2023 /PRNewswire-PRWeb/ -- Intelligent.com, a trusted resource for online degree rankings and higher education planning, has published a recent survey report that gauges how prepared federal student loan borrowers feel regarding the resumption of loan repayments in October. The report also shares insight into what borrowers spent money on based on their assumption of student loan forgiveness under President Biden's plan. This survey garnered responses from 977 borrowers who qualified for Biden's plan to forgive up to $20,000 in debt.
According to the survey, 75 percent of borrowers who qualified for Biden's student loan forgiveness plan were 'somewhat' or 'very' confident that they would receive at least $10,000 in debt relief. As a result of this confidence, 45 percent of these borrowers spent more money than they otherwise would have. Among this group, 17 percent say they spent an additional $5,001 to $7,500, 9 percent say they spent $7,501 to $10,000, and 5 percent say they spent more than $10,000. The most common uses of this money were retail purchases, other debt repayments, home and auto repairs, rent payments, and vacation.
"The Supreme Court decision is a cold shower for those who had their hopes pinned on a $10,000 relief," says Certified Financial Education Instructor James Allen. "It's like waiting for a tax refund only to find out the IRS made a mistake. The impact? Well, it's back to square one, folks. The dream of a financial breather has evaporated."
Survey results indicate that 58 percent of borrowers say they are 'very' or 'somewhat' unprepared for payments to resume. Conversely, 40 percent say they are 'very' or 'somewhat' prepared. As for their attitudes toward the Supreme Court's decision to reject the loan forgiveness program, 77 percent of borrowers say they 'strongly disagree' or 'disagree.'
All data found within this report derives from a survey conducted from July 6 to 10, 2023 by the survey platform Pollfish. In total, 977 respondents who qualified for President Joseph Biden's student loan forgiveness program were surveyed. Screening questions and demographic criteria were used to find qualified respondents. To view the complete report, please visit https://www.intelligent.com/1-in-3-federal-student-loan-borrowers-spent-money-they-thought-they-wouldnt-have-to-pay-back/
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