Student debt is so inescapable that even those who made payments during the pandemic freeze still owe more money than they originally borrowed

Student debt is so inescapable that even those who made payments during the pandemic freeze still owe more money than they originally borrowed
  • The Education Dept. released data on Navient borrowers who made voluntary payments during freeze.

  • It found that 63% of them are "underwater," meaning they aren't even $1 less in debt.

  • Democrats say the student-loan-payment pause isn't enough, pushing for $50,000 in debt cancellation.

  • See more stories on Insider's business page.

President Joe Biden recently extended the freeze on student-loan payments that was set to expire in September to give borrowers an additional four months of pandemic relief.

But for those who used the freeze to pay off their debt, many of them couldn't even make a dent in the amount they initially borrowed.

The National Consumer Law Center and the Center for Responsible Lending received data from the Education Department using a Freedom of Information Act request regarding the debt statuses of borrowers serviced by Navient, the nation's largest student-loan company. It found that of the 428,268 borrowers who made almost $600 million worth of voluntary payments during the pandemic pause, 63% of them are "underwater," meaning they are not even $1 less in debt than their original balances.

In addition, of the underwater borrowers, 67% of them owe 100% to 125% of their original balance, 26% of them owe 125% to 150%, and 6% of them owe more than 150% of their original balance.

This shows how, even as borrowers might continue to make regular payments, the accumulating interest can sometimes keep borrowers in an endless cycle of repayment.

Insider previously reported that after the passage of the Higher Education Act in 1965, banks began raising interest rates on student loans, and the system came to profit lenders at the expense of pushing more borrowers further into debt and default.

"It really is a debtors' prison," David Wise, a 59-year-old who started with $79,000 in student debt and now owes $236,485, previously told Insider.

The data also reflected some Democratic lawmakers' concerns that the federal payment pause doesn't go far enough. Senate Majority Leader Chuck Schumer, Massachusetts Sen. Elizabeth Warren, and Rep. Ayanna Pressley said in a statement following the extension of the pause that given the $1.7 trillion student-debt crisis, the president must go further and cancel $50,000 in student debt per borrower.

Once the payment pause lifts in February, millions of borrowers must start making payments on loans that have been on pause for almost two years. This may not only be difficult for borrowers but also presents administrative challenges for the servicers, given that two companies don't intend to continue their loan services past December and close to 10 million borrowers must switch to new loan companies.

"The president has the power to cancel $50,000 in student-loan debt right now," Warren previously told Insider. "Sen. Schumer and I are going to continue to push for this, but Biden doesn't need any authorization from Congress. He needs to pick up the pen and do it himself."

Do you have a story to share about student debt or concerns with restarting student-debt payments? Reach out to Ayelet Sheffey at

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