Houstonians face student loan payments once again
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Americans with federal student loan debt are facing monthly bills again as payments have resumed after a three-year pause.
State of play: While interest on student loans started accruing again in September, payments are coming due this month, marking an end to the COVID-era relief put in place in 2020.
Why it matters: For millions, the resumption of student loan payments will result in real and potentially painful spending cuts.
- Those cuts could also lead to an economic slowdown, Axios' Emily Peck writes.
By the numbers: More than 3.8 million Texans owe an average of $33,000 in student loan debt, totaling $127.2 billion, according to the U.S. Department of Education.
- Borrowers between the ages of 25 and 49 owe the most.
What you're saying: Readers who responded to our recent Axios Houston survey said the pause had allowed them to build savings, pay off other debts and make career changes, among other things. Many said they will now have to curtail their spending and find other income streams.
- Tracy M., a psychotherapist with more than $100,000 in student debt, said the forbearance allowed her to offer mental health services for lower sliding-scale fees, but now she has to increase her service rates as well as cut expenses and work more.
- Mia M., a recruiter with $95,000 in student debt, said she was able to get out of credit card debt and improve her credit score in the past three years. Now, she says, she'll "no longer be able to save."
- Greg D. said his children's student loans will lead to less activities and travel.
Flashback: Nearly 1.4 million Texas borrowers could have had their student loans forgiven under the Biden administration's plan that the U.S. Supreme Court struck down this summer.
Yes, but: Almost 64,000 borrowers in Texas who have made payments for around 20 or 25 years did have their balances forgiven through a different federal program.
Of note: This summer, the Department of Education introduced Saving on a Valuable Education (SAVE), an income-driven repayment plan that will lower monthly payments for certain low-income borrowers.
The intrigue: Some economists say the end of the reprieve won't reduce consumer spending enough to impact the larger economy as some feared, Axios' Hope King reports.
- John Diamond, director of the Rice's Baker Institute for Public Policy's Center for Public Finance, told Axios this summer that while over three million Texans may have to reign in their consumption after loan payments resume, that's still a small fraction of the state's population of nearly 30 million.