How the Student Loan Payment Pause Affected Borrowers' Credit Access and Credit Use. Current Policy Perspectives. 25-1
Saved in:
| Title: | How the Student Loan Payment Pause Affected Borrowers' Credit Access and Credit Use. Current Policy Perspectives. 25-1 |
|---|---|
| Language: | English |
| Authors: | Daniel H. Cooper, Maddie Haddix, Federal Reserve Bank of Boston |
| Source: | Federal Reserve Bank of Boston. 2025. |
| Availability: | Federal Reserve Bank of Boston. P.O. Box 55882, Boston, MA 02205. Tel: 617-973-3000; Tel: 617-973-3397; e-mail: boston.library@bos.frb.org; Web site: https://www.bostonfed.org/ |
| Peer Reviewed: | N |
| Page Count: | 9 |
| Publication Date: | 2025 |
| Document Type: | Reports - Research |
| Education Level: | Higher Education Postsecondary Education |
| Descriptors: | Student Financial Aid, Loan Repayment, Public Policy, Federal Aid, Loan Default, Debt (Financial), Policy Analysis, Credit (Finance), Futures (of Society), Economic Climate, COVID-19, Pandemics, Correlation, Paying for College |
| Abstract: | Early in the COVID-19 pandemic, the Trump administration paused federal student loan payments and interest accruals as a temporary relief measure for borrowers. The pause covered roughly 90 percent of all outstanding student loans, affecting about 38 million individuals, who collectively held a balance of $1.5 trillion. For each of the 17 million student loan borrowers in active repayment, the pause freed up $280 a month, on average, or about $13,500 per person over the entire 43-month period that the policy remained in effect. Another important feature of the pause was the provision that offered large-scale forgiveness of derogatory marks (DM) against individuals who had previously defaulted on a student loan. This brief examines how the pause affected federal student loan holders' credit access and credit use. Assessing the impact of the pause is important for understanding the efficacy of the policy change or of similar policies that could be considered during future periods of economic distress. |
| Abstractor: | ERIC |
| Entry Date: | 2025 |
| Accession Number: | ED671781 |
| Database: | ERIC |
| Abstract: | Early in the COVID-19 pandemic, the Trump administration paused federal student loan payments and interest accruals as a temporary relief measure for borrowers. The pause covered roughly 90 percent of all outstanding student loans, affecting about 38 million individuals, who collectively held a balance of $1.5 trillion. For each of the 17 million student loan borrowers in active repayment, the pause freed up $280 a month, on average, or about $13,500 per person over the entire 43-month period that the policy remained in effect. Another important feature of the pause was the provision that offered large-scale forgiveness of derogatory marks (DM) against individuals who had previously defaulted on a student loan. This brief examines how the pause affected federal student loan holders' credit access and credit use. Assessing the impact of the pause is important for understanding the efficacy of the policy change or of similar policies that could be considered during future periods of economic distress. |
|---|
