A new survey illustrates the confusion, stress, and anxiety student loan borrowers are experiencing amid the coronavirus pandemic.
The survey, shared exclusively with Yahoo Finance, analyzed responses from around 39,000 respondents from all 50 states. Advocacy organization Student Debt Crisis and social-impact startup Savi conducted the survey between May 8 and May 19, 2020.
Respondents answered 46 questions online about their experience with student debt during the pandemic, and 59% of them were facing “increased stress, anxiety, and depression” caused by their student loans during the pandemic.
"This data shows that many people with federal student loans are facing a financial disaster when relief ends,” Natalia Abrams, executive director at Student Debt Crisis said in a statement. “It reminds us there are glaring outcome disparities for borrowers who are older or who are black or brown. And, sadly, it documents the student debt crisis facing essential workers and healthcare professionals.
36% of borrowers didn’t know about CARES Act relief
There are about 44 million student loan borrowers across the U.S. holding $1.5 trillion in debt, with outstanding private student loans approaching $130 billion.
The average student loan borrower graduating with a four-year degree from a public or nonprofit college in 2019 holds around $30,000 in debt. One in 3 federal student loan borrowers were already struggling to afford their payments prior to the pandemic, and that number increased in recent weeks.
Congress provided relief to borrowers through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which suspended payments, interest, debt collections, and wage garnishments on federal loans.
But communication has not been smooth and borrowers are still confused about their options — while also being worried about their future.
The survey found that 36% of federal student loan borrowers didn’t even know there was COVID-19 relief and 40% were unaware that it was automatic.
"Student loan relief only helps if borrowers know it exists and understand the rules,” Savi Co-Founder Aaron Smith said in a statement. “COVID-19 has only increased the financial struggle for student loan borrowers of all ages, yet one out of three don't even know Congress is trying to help.”
Smith added: “Borrowers need education and better tools to get through this crisis — and then to live with a confusing existing system."
And once the relief ends on September 30, the outlook isn’t looking rosy, the survey found: 46% of borrowers now expect to struggle to get back on their repayment plan, after federal relief ends.
Private student loans, small businesses affects, and older borrowers
Realizing that the majority of private student loan borrowers were left out of the CARES Act, ten states — New York, Connecticut, Illinois, California, New Jersey, Vermont, Washington, Massachusetts, Virginia, and Colorado (as well as Washington D.C.) — offered some form of relief.
But the survey revealed that 80% of private loan borrowers are unaware that COVID-19 relief exists for private loans and 70% are not receiving any help from their lender.
The survey also offered insights into how student loan debt affects small businesses across America.
For instance, borrowers over the age of 46 were found to be 50% more likely than those below 45 to say that student debt had led to them to file for bankruptcy or close their small business.
Student debt is also hurting older Americans, the survey found.
67% of student loan borrowers over the age of 65 reported greater anxiety and depression due to their student loans.
And 6% of those in the same age group reported that their social security benefits were being garnished amid the health crisis, despite the Department of Education suspending debt collections on overdue loans.
Aarthi is a reporter for Yahoo Finance covering consumer finance and education.