Close to nine million people missed the first student loan payment they were supposed to make after the pandemic pause ended this fall, the Department of Education said Friday.
That amounts to about 40% of the 22 million people who had student loan payments due in October. The nearly nine million borrowers had not made their payments by well into November.
For comparison, less than 26% of borrowers missed their payment in October 2019, before the pandemic pause went into effect.
The payment pause began in March 2020 in the thick of the COVID pandemic. It ended in October after more than three years.
More than 28 million borrowers are supposed to be resuming payments, the department said in a release that took a “first look” at repayment data after the pause.
“Some are confused or overwhelmed about their options. We want to make sure borrowers know that our top priority is to support student loan borrowers as they return to repayment,” the Department of Education said.
For the next year, the Biden administration has an “on-ramp” program to protect borrowers from the “harshest consequences” of missed payments such as delinquency, default, and mandatory collections.
In June, the Supreme Court struck down President Biden’s massive $430 billion student debt relief plan that would have forgiven 40 million people’s loans.
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After the court’s decision, Biden said he would “stop at nothing to find other ways to deliver relief to hard-working middle-class families.”
In an email to student loan holders, the administration even said the Supreme Court “got it wrong” on student debt.
Biden has still managed to forgive up to $116 billion in student loans for more than 3.4 million people, the administration said in August.
Another move the administration has taken is creating the Saving on a Valuable Education (SAVE) plan, which cuts monthly payments to $0 for millions of low-income borrowers.
On Friday, the Education Department said that more than 5.5 million borrowers are already enrolled in the SAVE Plan, including 2.9 million who do not have to make any payments.
Michael Burry, known for being among the first investors to predict the subprime mortgage crisis, called the lower repayment numbers a “red flag.”
“An overlooked warning of economic stress?” Burry posted Monday on X.
Leftist lawmakers and activists have long called for broad student debt relief, and for years have urged the Biden administration to grant it. Critics argue that forgiving student loans is unfair to those who sacrificed to pay off their loans, especially since taxpayers ultimately pay for any government-funded debt relief.