More than half of Americans who’ve failed to pay student-loan bills since the October restart said the main reason was that payments were unaffordable, according to new research by the Federal Reserve Bank of Philadelphia.

The study comes as the Biden administration seeks new ways to write down student loans or make repayment manageable, after its wider debt-forgiveness plan was struck down by the Supreme Court last year.

Some 22% of borrowers anticipated failing to make at least one of their scheduled payments in last quarter, with about half of that group saying they’d miss all three, according to the report by the Philadelphia Fed’s Consumer Finance Institute.

Among those who made less than their full payment, more than half did so because they found it unaffordable. About 15% said they strategically skipped or postponed instalments because non-payment can’t be reported to credit rating companies until later this year – part of the administration’s plan to ease resumption of payments after a 3 1/2-year pandemic freeze.

About 12% of borrowers in the survey expected to see their capacity to make a payment worsen after October, rising to 17% who said they didn’t expect to pay in December.

That aligns with Department of Education data on transfers to the US Treasury which show monthly payments declined after an initial surge when the freeze ended.

Overall, there are some “encouraging” signs that borrowers managed the restart better than they’d feared, but also “clear evidence that borrower distress has not been eliminated,” wrote the report’s authors, Tomás Monarrez and Dubravka Ritter.

They also warned that many parents who took on student debt on their children’s behalf are struggling with payments, and suggested that those borrowers should be “considered for available or tailored relief programs.”

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