Search Results
Working Paper
On Intergenerational Immobility : Evidence that Adult Credit Health Reflects the Childhood Environment
Using a novel dataset that links socioeconomic background to future credit, postsecondary education, and federal student loan and grant records, we document that, even though it is not and cannot be used by credit agencies in assigning risk, background is a strong predictor of adult credit health. A relationship remains upon inclusion of achievement, attainment, and debt management metrics. These findings reveal a new dimension along which childhood circumstances persist into adulthood and imply that the many important contexts in which credit scores are relied upon to evaluate individuals ...
Discussion Paper
A Few Thoughts on the Recent Deceleration of Student Loan Debt
While the amount of student loan debt outstanding has continued to rise in recent quarters, its rate of growth has slowed recently.
Discussion Paper
A Trillion Dollar Question: What Predicts Student Loan Delinquency Risk?
Over the past ten years, the real amount of student debt owed by American households more than doubled, from about $450 billion to more than $1.1 trillion. As a result of this increase, in 2010 student loan debt surpassed credit card debt as the largest class of non-housing consumer debt.
Working Paper
Implications of Student Loan COVID-19 Pandemic Relief Measures for Families with Children
The initial years of the COVID-19 pandemic and the resulting economic fallout likely posed particular financial strain on U.S. households with children, who faced income disruptions from widespread jobs and hours cuts in addition to new childcare and instruction demands. One common expense for many such households is their student loan payment. The Coronavirus Aid, Relief, and Economic Security (CARES) Act included provisions to curb the impacts of these payments, which have been extended several times. These measures were not targeted and thus applied independent of need. This chapter ...
Working Paper
Student Loans, Access to Credit and Consumer Financial Behavior
This paper provides novel evidence that increased student loan debts, caused by rising tuitions, increase borrowers’ demand for additional consumer debt, while simultaneously restricting their ability to access it. The net effect of student loan debt on consumer borrowing varies by market, depending on whether the supply or demand channel dominates. In loosely underwritten credit markets, increased student loan debt causes borrowing to increase, while in tightly underwritten markets, increased student loan debt reduces the use of credit. These findings match predictions of a standard ...
Working Paper
A Trillion Dollar Question: What Predicts Student Loan Delinquencies?
The recent significant increase in student loan delinquencies has generated interest in understanding the key factors predicting the non-performance of these loans. However, despite the large size of the student loan market, existing analyses have been limited by data. This paper studies predictors of student loan delinquencies using a nationally representative panel dataset that anonymously combines individual credit bureau records with Pell Grant and Federal student loan recipient information, records on college enrollment, graduation and major, and school characteristics. We show that ...
Discussion Paper
Developments in the Credit Score Distribution over 2020
The distribution of household credit risk can vary with aggregate economic and credit conditions. For example, the share of subprime-scored borrowers declined at a relatively steady pace during the economic recovery from the Global Financial Crisis. Although the COVID-19 pandemic interrupted the economic conditions that supported this trend, the pace of decline accelerated following the pandemic’s onset in March 2020. The analysis that follows suggests that this acceleration was largely driven by the Coronavirus Aid, Relief, and Economic Security Act’s (CARES Act) forbearance provisions.