Debt Moratoria: Evidence from Student Loan Forbearance

Michael Dinerstein, Constantine Yannelis and Ching-Tse Chen

American Economic Review: Insights, 2024, vol. 6, issue 2, 196-213

Abstract: We evaluate the effects of the 2020 student debt moratorium. Using administrative credit panel data, we compare borrowers whose loans were frozen to borrowers whose loans were not frozen based on whether the government owned the loans. We estimate that borrowers used the new liquidity to increase borrowing on mortgages, auto loans, and credit cards rather than avoid delinquencies. The effects are concentrated among borrowers without delinquencies, who saw no change in credit scores. The results highlight an important complementarity between liquidity and credit, as liquidity increases the demand for credit even as the supply of credit is fixed.

JEL-codes: E32 G21 G51 H81 I22 I23 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Debt Moratoria: Evidence from Student Loan Forbearance (2023)
Working Paper: Debt Moratoria: Evidence from Student Loan Forbearance (2023)
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DOI: 10.1257/aeri.20230032

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