Americans Pull Back Support on Student Loan Debt Forgiveness

A recent study by The Harris Poll on behalf of Yahoo Finance finds that, despite the increasing national conversation around student loan debt forgiveness, support for that forgiveness has dipped.

In an independent study conducted in December 2020, The Harris Poll found that nearly two-thirds of Americans supported forgiveness of a flat amount of student loan debt (64%), and more than half (55%) supported forgiveness of all student loan debt. Overall support in February 2021 appears to have declined. Less than half of all Americans (46%) say they support any level (i.e., flat rate, full amount) of student loan debt forgiveness by the U.S. government.

This could present a problem for the 22% of Americans who report having student loan debt. In fact, four out of five of these Americans (81%) report having more than $10,000 in total student loan debt. Younger adults would also suffer more with over one-third (37%) of those ages 18-34 reporting having student loan debt, and about one-third (34%) of Americans ages 35-44 reporting the same.

Just forty percent of Americans report being able to pay off a student loan to at least one lender, with 70% paying off their most recent student loan debt in five years or fewer.

However, student loan debt is not always a solo effort. Although three-quarters (76%) of student loan debtors say their loans went toward financing their own education, a quarter (23%) say they have student loan debt for a spouse’s or partner’s education, and 16% are carrying student loan debt on behalf of a dependent’s education.

Who should resolve the crisis? The majority of Americans (59%) agree that, between the two institutions, any government action on student loan forgiveness should come via Congress, not the President.

This may explain why two-thirds (67%) of Americans say that a politician’s stance on student loan forgiveness is at least somewhat important to them when deciding how to vote. In fact, nearly one in three Americans (30%), say a politician’s stance on this topic is very important to them. Certain groups placed more importance on politicians’ stances than the average American, including

• those under age 44 (72%), which may come as little surprise since more than a third (36%) report having student loan debt,
• those in high income households (73% HHI $100K+ vs. 65% HHI <$50k), who are more likely to possess higher levels of student loan debt,
• and African Americans (76% vs. 67% of White Americans and 58% of Hispanics).

Despite more than half the country currently opposing student loan debt forgiveness, when asked if canceling $50,000 in student loan debt per borrower would help or hurt the economy, 55% of Americans said it would help the economy. Such legislation would be a game changer for the 68% of student loan debtors who report having less than $40,000 in total student loan debt.

The impact of student debt extends beyond the economy and finances, though, forcing many Americans to delay important life events. As a result of student loan debt, debtors have decreased discretionary spending (41%) and passed up on personal or financial investment opportunities, such as investing in a business or saving for retirement (39%). Student loan debtors have also delayed buying a home (30%), receiving healthcare (27%), starting a business (21%), and starting a family (14%) because of their debt.

Student loan debt has also influenced genders disproportionately. As a result of student loan debt more women than men say they’ve decreased discretionary spending (44% vs. 36%), delayed buying a home (36% vs. 24%), and delayed healthcare like doctor’s appointments, buying medicine, and surgery (34% vs. 18%). Men have also experienced delays in their ambitions. More men than women say student loan debt has made them delay starting a business (26% vs. 17%) or a family (18% vs. 8%).

Moreover, the pandemic has exacerbated the situation by forcing people to delay payments for the very loans that prevent them from getting on with life. Since the student loan payment pause began in March 2020 as a result of the pandemic, 44% of student loan debtors say they have not made any payments. Another 24% say they have only made some of their regular payments.

Methodology

This survey was conducted online within the United States by The Harris Poll on behalf of Yahoo Finance during February 19-22, 2021, among 1,059 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. For more information on methodology, please contact Dami Rosanwo.