Roughly 1 in 10 borrowers with existing student loans are refusing to pay them back as part of an intentional boycott aimed at pressuring the government into completely wiping out federal student loan debt, according to the findings of a new survey.
The survey was conducted by online magazine Intelligent.com in January among 1,000 federal student loan borrowers, and the age of respondents was balanced to reflect the demographics of student loan borrowers.
The survey was aimed at finding out how borrowers are coping with the resumption of student loan payments and collections roughly three months after the pause on federal student loan repayments came to an end following a debt-ceiling deal that prohibited President Joe Biden from extending it further.
The federal government, under the Trump administration, paused student loan repayments in 2020 amid the COVID-19 pandemic in an effort to ease the financial burden on Americans.
That pause was extended multiple times under both the Trump and Biden administrations despite concerns that doing so could have significant implications on the wider economy and burden taxpayers.
Borrowers Boycotting Repayments
Furthermore, 9 percent of borrowers who haven’t made any payments said they are intentionally boycotting to pressure the government into canceling federal student loan debt. Nearly 70 percent of borrowers said they haven’t yet resumed repayments because they are unable to afford it, however.
Among the borrowers taking part in the student loan repayments boycott, 44 percent told Intelligent.com that they believe not making repayments will result in the government canceling some federal student loan debt.
Approximately 28 percent said they believe it’s “likely” the boycott will lead the federal government to cancel all federal student loan debt.
Meanwhile, 64 percent said they believe it’s “highly likely” (32 percent) or “somewhat likely” (18%) that a boycott will help “elect political candidates that believe in loan forgiveness.”
The survey findings come after the Supreme Court struck down President Joe Biden’s loan forgiveness plan in 2021.
Supreme Court Rules on Biden Debt Relief Initiative
Republican lawmakers also contested that the debt relief initiative, which came at a time of soaring inflation, was illegal and could not be rolled out without authorization from Congress.According to a Jan. 12 press release from the White House, borrowers enrolled in SAVE who took out initial loans of less than $12,000 and have made payments for the past 10 years will have their remaining debt automatically canceled beginning in February.
“Although the frustration behind the student loan boycott is understandable, it’s unlikely to lead to positive change,” said Jake Hill, founder and CEO of consumer debt firm DebtHammer, in a press release.
“Instead, it will destroy the credit scores of those who choose to participate. This may not seem like a major issue in the short term, but failing to pay your student loans can make it more difficult to obtain funding for future purchases. For example, if you default on your student loans, you’ll be unable to obtain most mortgages, which will derail any plans you have to purchase a home,” Mr. Hill added.
