A New York Times piece from Lydia DePillis covers the upcoming end of a pandemic-era policy that greatly benefitted student borrowers: the student loan repayment pause. The piece details the consequences for a generation of students, and cites Project Lead Laura Beamer and JFI’s flagship Millennial Student Debt series and our recent report on the repayment pause.
Emerging research has found that in addition to freeing up cash, the repayment pause coincided with a marked improvement in borrowers’ credit scores, most likely because of cash infusions from other pandemic relief programs and the removal of student loan delinquencies from credit reports. That let people take on more debt to buy cars, homes and daily needs using credit cards — raising concerns that student debtors will now be hit by another monthly bill just when their budgets are already maxed out.
“It’s going to quickly reverse all the progress that was made during the repayment pause,” said Laura Beamer, who researches higher education finance at the Jain Family Institute, “especially for those who took out new debt in mortgages or auto loans where they had the financial room because they weren’t paying their student loans.”
From the series:
Millennial Student Debt