Outstanding student loan debt has swelled to more than $1.6 trillion, according to the website Private Student Loans Guru, and that situation is projected by some to get worse.
CNBC reports that prior to the pandemic, about 1 in 7 borrowers were behind on their student loans, and as many as two-thirds were making only minimum interest payments and their balances were not going down. And that situation could get worse when federal protections under the CARES Act end in September.
The Brookings Institute released a report indicating that “the student debt crisis was already at a tipping point and will be pushed over the edge by this pandemic.”
Democrats in Congress included an extension of the moratorium on student loan defaults through the end of September next year, but it is unclear if Republicans will support the provision.
However, some consumer advocates say that extending the moratorium only delays the inevitable, and that debt forgiveness is “essential” to help those individuals recover financially.