College Debt

Will COVID-19 send borrowers’ default rates soaring?


The coronavirus pandemic has made it harder for student loan borrowers to make payments on debt that totals $1.67 trillion nationally. With students graduating into what some experts call the worst job market in U.S. history, Congress has offered federal student loan rate reductions and interest-free payment pauses — although these are set to expire Dec. 31 without additional action. As of early August, with a COVID-19 surge occurring in many states, many students considering college this fall don’t know whether schools will open in-person, virtually or at all, and some may postpone enrollment. Some students have sued colleges for allegedly failing to provide adequate tuition and fees refunds after switching to online-only learning in the spring. New Trump administration rules, meanwhile, make it harder for students who believe they were defrauded by online, for-profit schools to have their loans forgiven.

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