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Study on Impact of Student Loan Pause

March 23, 2022

A new analysis by the California Policy Lab and the Student Loan Law Initiative shows that the student loan pause improved the credit standing for most of the 26 million affected borrowers who have had their payments paused since March 2020. The analysis also projects what may happen if the pause expires in May, including that at least 7.8 million borrowers are at high risk of struggling to repay their loans.

“The pause was a key way Congress alleviated financial pressures on Americans during the pandemic, and it appears to have worked quite well,” explained co-author Evan White, executive director at the California Policy Lab.

“Put plainly, the pause on student loan payments worked,” said Dalié Jiménez, director of the Student Loan Law Initiative at the University of California, Irvine. “This new research shows that when people with student debt were thrown an economic lifeline by the government, they caught it—building stronger credit, paying down other debts and weathering the pandemic while limiting damage to their financial lives.”

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