Who Is At Risk When Student Loan Payments Resume?

Particularly at risk: Black borrowers, women, and borrowers who didn’t graduate

When the global COVID-19 pandemic began in March 2020, the U.S. Department of Education made the bold move to pause payments on eligible federal student loans while fixing interest rates at 0%. In the meantime, all collection activity on federal student loans was brought to a halt, which proved crucial as millions of Americans lost jobs and income due to the initial lockdowns caused by COVID-19.

This emergency deferment period was meant to be temporary, yet the federal government announced several extensions since the first deadline was announced. The federal government extended forbearance past the Dec. 31, 2022, deadline again after federal courts blocked the proposed student loan debt relief program from going through. Payments are expected to begin 60 days after the block is lifted or after the program begins, or 60 days after June 30, 2023—whichever comes first.

Either way, it’s pretty safe to say that payments on federal student loans will eventually resume, even if some loans are ultimately forgiven before that takes place. Unfortunately, this likely will adversely impact some people more than others, as we’ll explain below.

Key Takeaways

  • The U.S. Department of Education enacted emergency deferment of eligible federal student loans in March 2020 to help borrowers affected by the COVID-19 pandemic.
  • The federal government put a pause on payments and collection activity, and interest rates were fixed at 0%.
  • The deferment period was extended into 2023 after a court order blocked the student loan debt relief program from going through.
  • When payments on student loans resume later this year or next year, those hurt worst likely will be Black and African American borrowers, women, and people who have student loans but no degree to show for it.

Which Groups Will the End of Deferment Hurt the Most?

When the pause on student loan payments and interest finally comes to an end, anyone with a higher-than-average debt burden will naturally have a greater financial challenge ahead of them than those with less college debt. As such, the following three groups are particularly at risk once the current student debt deferment period comes to an end:

Black and African American Borrowers

According to a January 2022 poll conducted by CNBC and Momentive, 68% of adults surveyed in the U.S. have some form of debt, including student loans. One in four (24%) Black adults has federal student loans, compared to 15%, 14%, and 11% for Hispanic, White, and Asian Americans, respectively.

Not only are Black and African American borrowers more likely to have student loan debt, but they also owe more on average. According to the Board of Governors of the Federal Reserve System, Black borrowers took out the largest average amount of federal student loan money in 2019 at $44.88 thousand, compared to $40.17 thousand and $30.89 thousand for their White and Hispanic counterparts, respectively.


The CNBC and Momentive poll also found that women (19%) are more likely than men (11%) to have student loan debt in general, and this holds true across all surveyed racial and ethnic groups. The poll also notes that Black and Hispanic women are twice as likely as their male counterparts to have student loan debt after graduating.

The study also showed that six in 10 (62%) adults with federal student loans had struggled with their mental health as a result of this financial burden. However, women (65%) were more likely than men (54%) to experience a detrimental impact on their mental health due to their student debt load.

Borrowers Who Didn’t Graduate

Finally, people who attended college but never graduated will likely face a significant financial challenge once student loan payments resume. After all, the financial benefits of attending college are felt more profoundly by those who have a degree to show for it.

While it’s difficult to find exact figures for how many people borrow for college without graduating, recent data from the National Center for Education Statistics (NCES) shows that 59% of first-time, full-time college students earned a bachelor’s degree within six years of starting school at a public institution of higher education. Imagine how much student loan debt someone could earn within six years, then consider how difficult it would be to pay off without a college degree.

Bear in mind that there is also an income disparity among workers based on their educational attainment. Per figures from the U.S. Department of Labor, men with some college but no degree reported median weekly earnings of $1,047 in 2021, while women with some college but no degree earned $803 per week. Meanwhile, men with a bachelor’s degree earned $1,512 per week, whereas women with a bachelor’s degree earned $1,165 in weekly pay.

When Is Student Loan Deferment Going to End?

Emergency relief for federal student loans was scheduled to expire on Dec. 31, 2022. But that changed after federal courts blocked the Biden administration's plan to implement its student loan debt relief program. In order to help borrowers, the federal government extended the forbearance period to either 60 days after the forgiveness program begins (or the court-ordered block is lifted) or 60 days after June 30, 2023–whichever comes first.

Will Student Loan Deferment Be Extended Again?

Yes. The pause on federal student loan payments and the fixed 0% interest rate was extended again past the Dec. 31, 2022, deadline. The move came after federal courts blocked the federal government's plan to offer certain student loan borrowers debt relief. The new deadline is either 60 days after the order is lifted (or the forgiveness program begins) or 60 days after June 30, 2023—whichever comes first.

Should You Make Student Loan Payments During Deferment?

You can make student loan payments during the deferment period if you wish to, but you should only do so if you can easily afford to. By making payments now, every penny that you pay will go directly to the principal of your balance. This can help you save money on interest later down the line, which can also help you speed up your repayment time line.

The Bottom Line

Payments eventually will resume for federal student loans, but not everyone will feel the impacts of this move equally. Black and African American borrowers, women, borrowers who didn’t graduate, and anyone already struggling with their finances are naturally going to have a harder time starting or getting back on track with their monthly student loan payments.

That said, there are some steps that borrowers can take if they’re worried about their loan payments resuming come Jan. 1, 2023 (or later if deferment is extended again). If you find yourself in this situation, you may want to consider working with your loan servicer to switch repayment plans so you can secure a more affordable monthly payment. You can even look into income-driven repayment plans, which let borrowers with low incomes pay as little as $0 toward their student loans each month.

Article Sources
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  1. Federal Student Aid. “COVID-19 Emergency Relief and Federal Student Aid.”

  2. U.S. Bureau of Labor Statistics. “Employment Recovery in the Wake of the COVID-19 Pandemic.”

  3. U.S. Department of Education. "Biden-Harris Administration Continues Fight for Student Debt Relief for Millions of Borrowers, Extends Student Loan Repayment Pause."

  4. SurveyMonkey. “CNBC|Momentive Poll: ‘Invest in You’ January 2022.”

  5. Federal Reserve System. “Survey of Consumer Finances, 1989 – 2019: Education Installment Loans by Race or Ethnicity.”

  6. National Center for Education Statistics. “Status and Trends in the Education of Racial and Ethnic Groups: Indicator 23: Postsecondary Graduation Rates.”

  7. U.S. Department of Labor. “Median Weekly Earnings by Educational Attainment and Sex (Annual).”

  8. The White House. "Fact Sheet: President Biden Announces Student Loan Relief for Borrowers Who Need It Most."

  9. Federal Student Aid. “If Your Federal Student Loan Payments Are High Compared to Your Income, You May Want to Repay Your Loans Under an Income-Driven Repayment Plan.

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