With Debt Relief, Borrowers Will Spend More on Basic Needs
Credit: d3sign / Moment / Getty Images- Eighty-three percent of borrowers expect changes to their spending or savings under Biden’s debt relief plan.
- Borrowers previously shared student debt’s impact on their ability to pay for day-to-day needs, housing, and emergencies.
- Despite mixed reactions, most likely voters support all parts of Biden’s plan.
Just two weeks after President Biden announced his student debt relief plan, borrowers are sharing all the ways they intend to use their expected additional savings.
In a new survey by Data for Progress, more than 2 in 5 likely voters who are also borrowers (41%) say they will increase their spending on basic necessities like food or housing.
Borrowers also say they plan to decrease other debts or pay bills (38%) and save more for long-term goals (35%).
Over the last few years, borrowers have repeatedly shared the various ways student loan debt has negatively impacted their ability to spend and save.
In a BestColleges and Bankrate survey conducted in November 2021, 43% of borrowers stated that had the payment pause been lifted in February 2022 as originally planned, it would negatively affect their ability to save for emergencies or retirement.
More than a third of those respondents (36%) also said their ability to pay for day-to-day essentials would be negatively impacted, while a quarter (25%) said it would negatively affect their ability to pay for rent or housing.
A more recent Bankrate survey revealed that 30% of millennials have delayed buying a house due to student loan debt.
Though Biden’s debt relief plan has been met with a mix of reactions, the Data for Progress survey reveals that all parts of the plan are supported by the majority of likely voters.
Nearly two-thirds of likely voters (64%) support covering borrowers’ unpaid monthly interest, while 61% support lowering payments on undergraduate loans from 10% to 5% of income.
Voters are most likely to oppose the elimination of $10,000 of student debt for borrowers earning under $125,000 a year — arguably the standout part of Biden’s plan.
As the rollout of the new debt relief plan continues, borrowers can stay updated on how to qualify and assure their debt is relieved by checking our FAQ page.