Student Loan Borrowers Get Deeper in Debt from Pause in Payments

In Analysis by Michael Rae

A remarkable new working paper shows the household finances of student loan borrowers have become more burdened by debt during the last three years. Although many have been excused from making payments since 2020, many of these borrowers responded to that relief by taking out other kinds of loans.
Here’s what the University of Chicago’s Michael Dinerstein, Ching-Tse Chen, and Constantine Yannelis found in their study, in which they compared borrowers whose payments were paused with those who were required to keep making payments:
We find that, relative to borrowers who had to continue paying their loans, borrowers who had a pause

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