Since he lost his job as a toy designer in March, Daniel Brennan has been holding things together through a combination of aid money and loan relief programs. A six-month forbearance on federal student loan collections reduced his monthly expenses by $280. (He began getting bills again this month but requested an extension, which his servicer granted until February.)
Mr. Brennan, who is separated and had moved into his own apartment shortly before the pandemic took root, gave up that apartment and returned to the house he owns in Willow Grove, Pa., with his soon-to-be ex. Their mortgage lender, Wells Fargo, let them defer their payments until at least the end of the year. Because interest still accrues, that will increase the total amount they owe over the life of the loan. That break, though, has given Mr. Brennan enough cash flow to stay current on his car loan and credit card bills and buy essentials like groceries and gas.
“Not paying the mortgage is making everything work,” said Mr. Brennan, who is 46. He’s leery of what will happen when that forbearance ends if he has not yet found another job.
Those who have held onto their jobs without having their hours or wages cut often ended up financially stronger than they were at the start of the year. Daniel Zeccola, 36, an emergency and internal medicine physician in Denver, took advantage of a 90-day forbearance on his private student loan from Laurel Road to shift his normal $5,000 monthly payment into his savings account instead.
The rate he earns on that savings account is higher than the interest rate on his loan, netting him an extra $90 a month, said Mr. Zeccola, who is saving for a down payment on a house. “I feel kind of guilty,” he said. “I’ve been protected from the downsides of what so many other people have experienced.”
Even as the swell in household liquidity provided by the government’s relief efforts starts to ebb and spending picks up again, creditors remain optimistic about consumers’ ability to keep up with their bills. The personal savings rate soared this spring, peaking in April, when Americans stockpiled $6.4 trillion — about a third of their disposable income. It has declined since, but stayed far higher than it was a year ago, according to the latest government data.