Americans looking forward to more student loan relief

Americans looking forward to more student loan relief
Federal Reserve Bank survey reveals many have higher hopes for federal student debt forgiveness, particularly older borrowers.
MAY 28, 2024
By  Bloomberg

Americans expect more federal student debt forgiveness in a survey conducted by the Federal Reserve Bank of New York last month.

The average perceived likelihood of a year-ahead increase in federal student debt forgiveness rose to 39% in April compared to 28.7% when the poll was last conducted in December. This is the highest reading since August 2022.

The expectations for federal student debt forgiveness was highest among older Americans. The share of consumers age 45 and older anticipating more relief rose sharply.

More than one in 10 Americans with federal student loans have been approved for some measure of debt relief under President Joe Biden. He initially vowed to cancel about $400 billion in student loan debt but that plan was struck down by the US Supreme Court last year.

Roughly 43 million Americans owe $1.6 trillion in student debt. Since last fall, consumers have been required to pay back this debt after a pause was put in place after the pandemic. But, missed federal student loan payments will not be reported to credit bureaus until the fourth quarter of this year. More than one in six borrowers reported being behind on payments.

Over the last six months, consumers have made about $32 billion in loan payments. But millions of consumers have not made any payments and many question the value of their degree. About one quarter of those who received a bachelor’s degree from a private not-for-profit institution would have done their education differently if given the chance, according to the 2023 Survey of Household Economics and Decisionmaking.

Even though millions of people have benefited from recent debt relief measures, new students who borrow will face more expensive loans. Earlier this month, the US Department of Education announced the interest rates on federal student loans for the upcoming academic year will be the highest in more than a decade. The rise in student loan interest rates will likely further pressure the Biden administration to do more to relieve borrowers.

Latest News

Risks and opportunities ahead of the great wealth transfer
Risks and opportunities ahead of the great wealth transfer

Younger heirs may “be more dubious about forming traditional client-advisor relationships, having grown up with different expectations about financial guidance”.

Next generation of women advisors are 'wicked smart'
Next generation of women advisors are 'wicked smart'

It's about EQ not just IQ - four advisors look back at their own careers while offering hope for the new wave of talent coming through.

Financial advisors, what is your volatility game plan for client management?
Financial advisors, what is your volatility game plan for client management?

With targeted "comfort calls" and strategically automated follow-ups, advisors who leverage their CRM systems effectively can show up when clients need them most.

Trump eyes no taxes for Americans making less than $150k, says Lutnick
Trump eyes no taxes for Americans making less than $150k, says Lutnick

The plan could offer $24,000 in relief for some taxpayers, but experts warn of consequences.

No new trial for convicted GPB Capital executives
No new trial for convicted GPB Capital executives

"I've seen lots of denial in this business but this GPB thing take the cake," says one industry executive.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies