Personal Finance
Chappell Roan was one of the 25 million uninsured Americans
Chappell Roan at the 67th GRAMMY Awards held at the Crypto.com Arena on Feb. 2, 2025 in Los Angeles, California.
Christopher Polk | Billboard | Getty Images
With a Grammy win for best new artist, Chappell Roan is at a career high. A few years ago, she was one of the millions of Americans without a job or health insurance.
“I told myself that if I ever won a Grammy and got to stand up here in front of the most powerful people in music, I would demand that labels, and the industry profiting millions of dollars off of artists, would offer a livable wage and health care, especially to developing artists,” she said at the Grammy awards show in Los Angeles on Feb. 2.
“When I got dropped, I had zero job experience under my belt. And like most people, I had a difficult time finding a job in the pandemic and could not afford health insurance,” she said in her acceptance speech.
“If my label would have prioritized artists’ health, I could’ve been provided care by a company I was giving everything to. So, record labels need to treat their artists as valuable employees with a livable wage and health insurance and protection.”
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Roan, whose given name is Kayleigh Rose Amstutz, was released from her record label in 2020. That’s the same year a huge spike in unemployment resulted in an estimated 1.6 million to 3.3 million people losing coverage through their employers, according to the Health and Human Services Department.
At the time, coverage expansions put in place by the Affordable Care Act acted as a safety net for those experiencing coverage disruptions.
That government-backed aid significantly lowered the costs of coverage for people buying health insurance plans on the ACA marketplace. Those customers include anyone who doesn’t have access to a workplace plan, such as self-employed individuals like musicians, as well as students and the unemployed, among others.
‘Volatile’ income can make health coverage tricky
Chappell Roan accepts the Best New Artist award onstage during the 67th Annual GRAMMY Awards at Crypto.com Arena on Feb. 2, 2025 in Los Angeles, California.
Kevin Winter | Getty Images
Gains in Medicaid and marketplace coverage have contributed to significant declines in the uninsured rate, according to KFF, a nonprofit formerly known as the Kaiser Family Foundation.
“With the Affordable Care Act, there’s a health care safety net for artists who previously had none,” said Larry Levitt, KFF’s executive vice president for health policy. The ACA also guarantees insurance for pre-existing conditions and subsidizes premiums based on income, he said.
Yet, there can still be challenges for artists in getting health insurance if their recording labels don’t provide it, according to Levitt.
“If income is volatile, premiums can fluctuate and be unpredictable because subsidies are based on actual income for the year,” Levitt said. “So an artist who has no income for a period of time can be left with no viable health insurance options.”
“It makes it really hard, especially for starving artists,” said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.
‘A flaw in the industry at large’
Jeff Rabhan, the former chair of the Clive Davis Institute of Recorded Music at New York University’s Tisch School of the Arts, said in a guest column in The Hollywood Reporter that “Roan’s call for record labels to pay artists a livable wage and provide health care was noble — but also wildly misinformed.”
In the column, published Feb. 5, Rabhan said “if labels are responsible for artists’ wages, health care and overall well-being, where does it end and personal responsibility begin?”
“Should artists have better health-care options? Absolutely,” Rabhan said in the column. “Sounds like a union thing to me. Most independent managers don’t have insurance, either — it’s a flaw in the industry at large, not just on the label side.”
Since those in the music industry are often paid as independent contractors, that makes it more likely they will forgo coverage, according to McClanahan, founder of Life Planning Partners and a member of the CNBC Financial Advisor Council.
“Unfortunately, many are not part of a union and are on their own in getting health insurance,” she said. “Sadly, many self-employed people don’t understand the Affordable Care Act and how to obtain insurance on their own.”
Even today, there are about 25 million uninsured Americans, KFF research shows.
“Most of the country is involved in [an] employer/employee relationship where the company is responsible for their wages, health care, and some care about your well-being. However, most artists don’t have this luxury and don’t understand they are basically running their own business,” McClanahan said.
“At least give them the tools.”
CNBC’s attempts to reach Roan for comment were not successful, but Roan responded to Rabhan on Instagram by saying she donated $25,000 to support “struggling dropped artists.”
franckreporter | Getty Images
Nearly 2 million federal student loan borrowers who’ve requested to be in an affordable repayment plan are stuck in a backlog of applications, waiting to be approved or denied, according to new data recently shared by the U.S. Department of Education.
The Education Department disclosed the information in a May 15 court filing in response to a legal challenge lodged by the American Federation of Teachers. The teachers’ union sued the Trump administration in March for shutting down access to income-driven repayment plan applications on the Education Department’s website.
IDR plans cap borrowers’ monthly bills at a share of their discretionary income with the aim of making their payments manageable.
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In late March, the Trump administration made the online applications available again, and said that it pulled the forms because it needed to make sure all repayment plans complied with a court order that blocked the Biden administration’s new IDR plan, known as SAVE, or the Saving on a Valuable Education plan.
Trump officials argued that the ruling had broader implications for other IDR plans, and it ended up removing the loan forgiveness component under some of the options.
The backlog complicates things for borrowers as the Trump administration restarts collection activity. The Education Department estimates that nearly 10 million people could be in default on their student loans within months.
Without access to an affordable repayment plan, student loan borrowers can be suspended on their timeline to loan forgiveness and at risk of falling behind and facing collection activity.
‘The opposite of government efficiency’
In the May court document, the Education Department disclosed that more than 1.98 million IDR applications remained pending as of the end of April. Only roughly 79,000 requests had been approved or denied during that month.
Consumer advocates slammed the findings.
“This filing confirms what borrowers have known for months: Their applications for loan relief have effectively been going into a void,” said Winston Berkman-Breen, legal director at the Student Borrower Protection Center.
The Center said that if the Education Department continued to move at its current rate, it would take more than two years to process the existing applications.
AFT President Randi Weingarten called the backlog “outrageous and unacceptable.”
“This is the opposite of government efficiency,” Weingarten said. “Millions of borrowers are being denied their legal right to an affordable repayment option.”
What’s behind the backlog
A spokesperson for the Education Dept. blamed the backlog on the Biden administration, saying that it “failed to process income-driven repayment applications for borrowers, artificially masking rising delinquency and default rates and promising illegal student loan forgiveness to win points with voters.”
“The Trump Administration is actively working with federal student loan servicers and hopes to clear the Biden backlog over the next few months,” they said.
The Biden administration put the student loan borrowers who’d enrolled in its new IDR plan, SAVE, into an interest-free forbearance while the GOP-led legal challenges to the program unfolded. Many of the currently pending IDR requests are likely from borrowers who are trying to leave that blocked plan to get into an available one.
Sarah Sattlemeyer, a project director at New America and senior advisor under the Biden administration, said that the current backlog began last year “and has existed across both the Biden and Trump administrations” as a result of the legal battle over the SAVE plan.
“It is a demonstration of how complicated the loan system is, how much uncertainty there has been over the last few years and what is at stake,” Sattlemeyer said. “There also isn’t clarity around how some applications in the backlog should or will be handled, such as those where a borrower chose an option that no longer exists on the application.”
In recent months, the Trump administration has terminated around half of the Education Department’s staff, including many of the people who helped assist borrowers.
That is also likely one reason why so many of the applications haven’t been processed, said higher education expert Mark Kantrowitz.
“Perhaps the reduction in staff is affecting their ability to process the forms,” Kantrowitz said.
The Trump administration’s resumption of collection efforts on defaulted federal student loans has far-reaching consequences for delinquent borrowers.
For starters, borrowers who are in default may have wages, tax returns and Social Security payments garnished.
But involuntary collections could also have a “spillover effect,” which puts consumers at risk of falling behind on other debt repayments, according to a recent report from the Federal Reserve Bank of New York,
As collection activity restarts, disposable income falls
“We were obviously somewhat concerned about potential spillovers to delinquencies on other types of debt,” the New York Fed researchers said on a press call earlier this month.
“During the period where people were not required to make payments on their student loans, they could have used that money to pay their credit card bills and auto loans,” the researchers said. “Now they have to make these payments again on their student loans, so that could put pressure on their ability to pay these other loans.”
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The U.S. Department of Education’s crack down on student loan repayments could take billions of dollars out of consumers’ pockets, reports show. Monthly collections on defaulted loans may reduce disposable personal income between $3.1 billion to $8.5 billion a month, according to research by JPMorgan.
“Part of the reason that some people are adding to credit card debt is because they have student loan payments — that’s the spillover effect,” said Ted Rossman, senior industry analyst at Bankrate. “Something’s got to give.”
‘It’s just money that can’t go to other financial things’
Until earlier this month, the Department of Education had not collected on defaulted student loans since March 2020. After the Covid pandemic-era pause on federal student loan payments expired in September 2023, the Biden administration offered borrowers another year in which they would be shielded from the impacts of missed payments. That on-ramp officially ended on Sept. 30, 2024, and the Education Department restarted collection efforts on defaulted student loans on May 5.
Whether borrowers face garnishment, or opt to resume payments to get current on their loan, that’s likely to have a significant impact on their wallet.
“It’s just money that can’t go to other financial things,” said Matt Schulz, chief credit analyst at LendingTree.
After the five-year pause ended and collections are resumed, the delinquency rate for student loan balances spiked, the New York Fed found. Nearly 8% of total student debt was reported as 90 days past due in the first quarter of 2025, compared to less than 1% in the previous quarter.
Currently, around 42 million Americans hold federal student loans and roughly 5.3 million borrowers are in default, according to the Education Department. Another 4 million borrowers are in “late-stage delinquency,” or over 90 days past due on payments.
Among borrowers who are now required to make payments — not including those who are in deferment or forbearance or are currently enrolled in school — nearly one in four student loan borrowers are behind in their payments, the New York Fed found.
As borrowers transition out of forbearance and into repayment, those borrowers may also face challenges making payments, according to a separate research note by Bank of America. “This transition will likely drive delinquencies and defaults on student loans higher and could have further knock-on effects for consumer finance companies,” Bank of America analyst Mihir Bhatia wrote to clients on May 15.
In a blog post, the New York Fed researchers noted that “it is unclear whether these penalties will spill over into payment difficulties in other credit products, but we will continue to monitor this space in the coming months.”
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