Americans think forgiveness of student loans is more likely than resuming payments in May

US President Joe Biden speaks during a meeting with private sector CEOs in the State Dining Room of the White House in Washington, DC on January 26, 2022.

Nicholas Kamm | AFP | Getty Images

The Biden administration has said student loan repayments will finally resume in May. Many people do not take this message seriously.

Americans believe some or all of student debt is more likely to be forgiven than bills to resume in three months, according to a CNBC + Acorns Invest In You student loan survey. (The online poll was conducted by Momentive between January 10 and 13 among a national sample of 5,162 adults.)

Only 29% of respondents ranked resuming student loans in the spring as the most likely outcome. More than a quarter believe the most likely situation is for the pause to extend beyond May, while 14% of people expect full loan forgiveness and 28% expect cancellation.

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When the US Department of Education announced it was extending the payment break in August, it said it would be the last break. Yet he then announced in December that borrowers would have more time, citing concerns about the new omicron variant of Covid-19. The payment break has now been extended five times.

“You can only cry wolf so many times before borrowers no longer believe the payment pause and interest relief is ending,” said higher education expert Mark Kantrowitz.

While the White House would likely prefer to restart payments and present it as evidence of an economic recovery, there are political and logistical factors to weigh.

President Joe Biden is under intense pressure to write off some debt, and making payments without doing so may signal to some that he gave up that option just six months before the midterm elections.

Then there’s also the fact that after two years of no student loan repayments, many borrowers have become accustomed to living without bills.

Even before the pandemic, the country’s outstanding student debt exceeded $1.7 trillion and placed a greater burden on households than credit card or automobile debt. It is estimated that around a quarter of borrowers, or 10 million people, are in default.

LISTEN NOW: Should student loan debt be forgiven? What are the hidden costs of college? Should financial education start at an earlier age? CNBC reporters and contributors discussed these topics and more on Twitter spaces.

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