Americans With Student Debt Slash Spending, Yet Still Struggle to Keep Up With Loan Payments
KEY TAKEAWAYS
- The median student loan borrower has cut $1,590 out of their typical yearly spending since student loan repayments resumed in 2023.
- The majority of borrowers have been able to manage the hit to their budget. But more borrowers are behind on their payments than usual.
Student loan borrowers are cutting back spending in order to restart loan payments, according to data released in 2025. Most are successfully managing their loans, but more borrowers than usual are struggling.
During the COVID-19 pandemic, the Department of Education paused all student loan payments. When payments restarted in October 2023, according to research from the Board of Governors of the Federal Reserve System released earlier this year, the typical student loan borrower trimmed an estimated $12.20 from their weekly spending per $10,000 of student debt they held.
That suggests that the median borrower, who has a balance of about $25,000 in student loans, has cut back their yearly spending by $1,590 to resume their payments.
Why This Is Significant
This analysis of student-loan payment data presents a nuanced view of the financial situation of Americans repaying student debt. Most have been able to stay in good standing, though many are cutting back on spending to meet their commitments. However, millions are at risk of defaulting, a higher number than has been historically seen. Concerns about the path forward for the U.S. economy could further complicate matters.
The majority of borrowers who resumed repayments have been able to manage the hit to their budget. Of the 18.8 million borrowers currently in repayment, nearly 13 million are in good standing. About a quarter of student loan borrowers surveyed by think tank Data for Progress said they expect to pay off their student debt by 2026.
However, the numbers show that more borrowers are struggling than usual. More than 4 million borrowers were on the verge of defaulting in the second quarter of 2025, which is more than 8x the number of student loan borrowers who were that seriously delinquent before the pandemic.
Additionally, some borrowers might be having trouble budgeting for their student loan payments as tariffs push prices up and the labor market slows down. Many borrowers have also said it is more challenging to resume payments because constantly changing student loan policies confuse them.
