Student Loan Borrowers Skip Payments: It's 'an Act of Civil Disobedience'

Irina Tracy doesn't listen to the countless financial advisers who warn of the consequences of not paying back your student loan debt. Instead, she's purposefully boycotting the payments, a stance she takes in hopes of applying pressure on the federal government to forgive student loan debt entirely.

"I see it as an act of civil disobedience in the name of education reform," Tracy told Newsweek. "My goal isn't just personal debt relief, but a radical transformation of the system."

Payments on federal student loans had been suspended in the early months of the COVID-19 pandemic by the Donald Trump administration, with borrowers given some respite at a time when so many were struggling financially. The break was then extended multiple times, but it came to an end on October 1, 2023, when payments resumed for millions of borrowers.

Tracy's decision to not repay her student loans is one that many other borrowers are taking.

As national student loan debt lies at 1.75 trillion, one in 10 borrowers have said they won't be paying off their loans as a matter of principle, according to a recent Intelligent.com survey of 1,000 federal borrowers.

The ones who are choosing not to make payments are "intentionally boycotting to pressure [the] government to cancel federal student loan debt," the survey said.

As one of the many purposefully ignoring payments, Tracy, who currently works as the chief editor at Love Advice, said she knows the boycott may not guarantee federal student loan forgiveness, but it's a way to move the needle in that direction.

"It's a step towards holding policymakers accountable," Tracy said. "We're saying that education should be a right, not a debt sentence."

While financial advisers warn of the mounting interest that builds on debt you don't pay off, Tracy remains committed to the principles behind not giving the government the money owed on her loans.

"We're sacrificing short-term comfort for long-term change," she said. "It's a bold stance, but sometimes, change requires bold actions."

Eric Lam is another student loan borrower who has decided to make a point to the federal government by not paying back his debt.

Lam, the head of business strategy at Los Angeles Tax Appeal, said his decision was not "hasty" and is instead a "conscious business order."

"My MBA trained me in financial strategy, not slavery," Lam told Newsweek. "This ratio has literally choked me, so that I cannot venture into any investment like buying a home or even starting my own family. Forgiveness seems like a fairy tale, yet resuming payments feels like throwing good money after bad."

Lam acknowledges the boycott might not magically wipe away all debt, but it does represent a mass demand for justice, he said.

"This boycott is a wake-up call for the policymakers, an illumination of student debt and how unsustainable this is," Lam explained.

Lam isn't worried about his accrued interest because he said the current system is already unsustainable. While there are short-term issues for him, he sees it as a way to get away from a broken system for the next generation.

"Failing to respond to an increasing rate of inflation and steady wage cuts is a long-term game of financial chicken," he said. "This boycott brings about a discussion, an opportunity to rethink a system that does not cage its graduates in perpetual cycles of debt."

Lam added: "I'm not just defaulting payments. I'm investing in change, in a world where education does not turn into life imprisonment."

Jack Epner, a 42-year-old Colorado resident currently living in Spain, said his decision to boycott came out of practicality as well.

"I can't afford to pay them, and what do I care when I need a roof and food as it's the government asking for money?" Epner told Newsweek.

Epner originally signed up for a remote program at Oregon State in 2018. He took out approximately $1,200 in loans, but chose to drop the program during the new student orientation.

Since then, he's never made payments. At the time his first payment was due, he was teaching English in Cambodia for just $500 a month.

"When my taxes are already misappropriated, and I've been living outside the country almost six years while they still bilk me for tax money, I can't say I feel bad about a few hundred dollars that hasn't been repaid," Epner said.

What Do the Experts Say?

If you ask any financial adviser, the decision the boycotting borrowers are making is precarious for their financial futures.

"I can say it's not a good idea," Alex Beene, the financial literacy instructor for the state of Tennessee, told Newsweek "This is not a consumer item that won't have implications if you do or do not purchase it. We're talking about a loan you legally agreed to pay."

Beene added that there are other options if you want to make your viewpoint on student debt forgiveness clear that don't involve risking your financial future, like protesting and writing to your elected representatives.

"Students need to know there are better ways of making their voices heard on this topic," he said.

When you opt to not make any payments on your loans, you can eventually be banned from future financial aid programs and lose any student loan repayment benefits. Plus, you'll see consequences when it comes to your overall credit score and even tax and Social Security benefits.

"Boycotting your student loan repayments has severe consequences and is something we would not recommend," Fred Amrein, the CEO and founder of PayForED, told Newsweek. "The government can garnish wages and other government payments like Social Security and tax refunds."

Still, Michael Belfor, a branch manager at American Pacific Mortgage, is sympathetic to many of his clients' plights as they work to pay off their debt with very few rewards.

"They're putting in effort, and it feel like they're barely making a dent in the debt," Belfor told Newsweek. "The job market is super tough. Some feel that due to this it's a choice between paying rent or making a student loan payment which isn't sustainable."

Where Does Student Debt Forgiveness Stand?

Last week, President Joe Biden approved $5 billion more in federal student loan forgiveness to those who have worked 10 years or more in public service and people repaying their loans for at least 20 years who haven't been able to get help through income-based plans.

Altogether, 74,000 more borrowers will see relief.

The president's prior plan to cancel student loan debt was found in violation by the U.S. Supreme Court last June. That plan would have seen forgiveness for up to $10,000 in debt for those making less than $125,000 a year.

Nationally, more than 3.7 million Americans have seen student debt forgiveness, which was an early promise Biden made when he first took office.

"From day one of my administration, I vowed to improve the student loan system so that a higher education provides Americans with opportunity and prosperity—not unmanageable burdens of student loan debt," Biden said in a statement. "I won't back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams."