Ms. Musselwhite doesn’t know how much her monthly payments will be, but she’s thinking about where she might need to cut back — and her partner’s student loan payments will start coming due, too.
Then it began to shrink, as those who continued loan payments were able to make progress while interest rates were set at zero.
A greater share of Black families with children were eligible than white and Hispanic families, although their prepandemic monthly payments were smaller.
(That reflects Black families’ lower incomes, not loan balances, which were higher; 53 percent of Black families were also not making payments before the pandemic.)
Economists at the University of Chicago found that rather than paying down other debts, those eligible for the pause increased their leverage by 3 percent on average, or $1,200, compared with ineligible borrowers.
Persons:
Musselwhite, Beamer
Organizations:
Institute, Federal Reserve, University of Chicago