A growing number of Americans are asking to borrow money from others in order to pay down their student loans, amid ongoing economic uncertainty and the recent resumption in federal loan collections.
Peer-to-peer lending platform SoLo Funds told Newsweek it has seen a 12-percent spike in members asking for assistance in paying their loans in 2025 compared to last year, with co-founder and President Rodney Williams adding: "We only expect that number to go up."
Why It Matters
The country's educational debt highlights the broader economic strains facing many Americans, expected to worsen through 2025 as fears of a recession begin to manifest. With the resumption in student loan collections—which will include wage garnishments—borrowers in default may be facing even greater economic difficulties in the near future.
What To Know
The federal government resumed student loan collections earlier this week, following a five-year hiatus enacted at the beginning of the COVID-19 pandemic. In addition to voluntary repayment plans, the "Treasury Offset Program" will allow the government to garnish wages, seize tax refunds and reduce Social Security benefits to pay down educational debts.
