Student loan debt affects millions of Americans, and small business owners are no exception. Amid rising inflation and supply-chain issues driving up costs, entrepreneurs also facing student loan debt have found it difficult to grow over the past year. But President Biden’s plan for student loan forgiveness could seriously ease that burden, finds a new report from Capital One and Morning Consult.
The report assessed small business owners’ long-term confidence in their success. Despite overwhelming optimism—90% of small business owners report confidence that their business will be operating in the next six months—entrepreneurs are facing no shortage of challenges in 2022.
Small business owners cited inflation, cash flow, and low sales as their biggest challenges over the past year, with concerns over inflation rising by 10% since March. Almost half of all small business owners (48%) report currently experiencing burnout, or having felt it in the past month. And of small business owners facing student loan debt, one-third report that it has negatively impacted their ability to scale or grow their business.
But that cohort sees relief on the horizon: 76% of small business owners with student loan debt say that Biden’s loan forgiveness plan will allow them to invest more into their business. The application for that loan forgiveness plan, which would forgive $10,000 in federal student debt for individuals earning less than $125,000, still has no set release date, but White House officials have said the program is still on track for an October launch.
The loan forgiveness program could have an even greater impact on small business owners than the student loan repayment, interest, and collection pause that took place during the COVID-19 pandemic, which only 56% of small business owners with student loans said allowed them to invest more in their business. Long story short, though inflation and other economic woes aren’t going anywhere, student debt relief could be the boost small businesses need to keep growing in a shifting marketplace.