Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit, said she was not surprised that so many borrowers hadn’t paid their bill. In the past, default rates among student loan borrowers have skyrocketed when payments resumed after natural disaster-related forbearances.
“I also attribute some of it to some borrowers just not realizing payments have come due,” Mayotte said.
Former President Donald Trump first announced the stay on federal student loan bills and the accrual of interest in March 2020, when the Covid-19 pandemic hit the U.S. and crippled the economy. The pause was extended eight times.