Student loan repayments resumed in October after a three-year pandemic-era pause and the Supreme Court this summer dashed hopes for relief by blocking President Biden’s plan to erase up to $20,000 in debt for eligible borrowers.
With the resumption of payments proving a financial hardship for many Americans, some people are turning to other means to find the money: asking for handouts.
Through October, the number of crowdfunding campaigns on GoFundMe tied to college loans has surged nearly 40% over the last 12 months, with those seeking to raise money coming from diverse backgrounds and across all age brackets, according to data the platform shared with CBS MoneyWatch.
“GoFundMe is often a reflection of real-time needs because it is a resource people turn to when they find themselves with unexpected expenses,” Margaret Richardson, GoFundMe’s chief corporate affairs officer told CBS MoneyWatch.
Similarly, GoFundMe saw a five-fold increase in fundraisers by schools trying to raise money when an emergency federal program offering free school meals ended in 2022.
More than half of federal student loan borrowers said say they would have to choose between making loan payments when the pandemic forbearance ended and covering necessities like rent and groceries, an August survey from Credit Karma found. Food banks also report an increase in requests for assistance since student loan payments resumed.
“As people realize they have obligations and are already at or beyond their budgets, GoFundMe is often a place people will turn for support from their families and communities to meet their needs in ways they otherwise can’t between their income and savings,” Richardson said.
Among the student-loan related GoFundMe campaigns is a plea for help from Jevaughn Edwards, a Drexel University senior studying economics. Edwards wrote that his grandparents, the cosigners on his student loans, recently passed away.
“As I embark on the last year of my studies, I am seeking any sort of support, aid, etc. that may be available to me. I am currently unregistered for the upcoming quarter due to a financial hold on my account amidst my situations,” Edwards said, adding that he has “no other resources to tap into.”
Edwards is trying to raise $40,000, which reflects his current outstanding student loan balance as well as what he would owe were he to recommence his studies. To date more than 50 people have donated a total of just over $3,000.
Another college student, Michael Paddleford, started a campaign two weeks ago to pay off his remaining tuition balance in order to receive a bachelor’s degree in criminal justice and human services.
“Unfortunately, I was recently notified of a remaining balance on my account that will prevent me from receiving my degree until it is paid off,” he wrote. “I have maxed out my student loans, and Financial Aid covered all but $5000 of my tuition costs.”
Five donors have contributed $270 against his $5,000 goal.
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