Research suggests pandemic student loan forgiveness may have worsened borrowers' financial outcomes

Summary

A new research paper argues that pandemic-era student loan forgiveness and payment moratoriums may have paradoxically made borrowers worse off. The article discusses how the pause on payments and interest, along with forgiveness promises, led to increased borrowing and spending, higher default rates, and ultimately left many borrowers in worse financial shape than before. With 9.2 million borrowers now delinquent — the highest rate in a decade — the piece suggests that well-intentioned loan forgiveness policies may have created moral hazard and negative long-term consequences.

Source

bskyResearch suggests pandemic student loan forgiveness may have worsened borrowers' financial outcomesbostonherald.com