Labor, Loans and Leisure: The Impact of the Student Loan Payment Pause

Diego A. Briones and Sarah Turner

No 33553, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Beginning in March 2020 and ultimately continuing to September 2023, most student loan borrowers had their required payments on federal student loans paused. For student loan borrowers with limited access to credit, the payment pause provided additional cash-on-hand that may have allowed them to reduce their work hours. Using survey data capturing individual finances, monthly work characteristics and educational attainment, we find that suspended student debt payments reduced average weekly hours worked by 1.34 (-4%) over a 10-month period with declines concentrated among workers who had not completed a college degree. For borrowers who had completed a college degree or graduate degree, there is no evidence that the payment pause changed employment or hours worked. These findings are consistent with consumer finance data showing that borrower households without a college degree are approximately twice as likely to report liquidity constraints relative to more educated households with federal student debt.

JEL-codes: I22 I23 J22 J24 (search for similar items in EconPapers)
Date: 2025-03
Note: ED LS
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