The Student Loan Pause has Improved Credit Scores, But Not Financial Distress

Since late March, most federal student loan borrowers have had expected payments and collections on their loans paused and interest set to 0 percent. This pause has resulted in improved credit scores but has not substantially changed indicators of financial distress, such as holding utilities collections debt. To understand the effects of the pause on borrowers, we look at a sample of credit records collected by one of the three major credit bureaus. We focus on people who had any student loans in February 2020, before the implementation of the student loan pause and most COVID-19 changes, and follow them into June 2020. #covid-19 #education