Research Report Student Loan Borrowers and Home and Auto Loans during the Pandemic
An Assessment of Credit Bureau Data
Kristin Blagg, Jason Cohn
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In response to disruptions to work, school, and home life that all Americans have experienced during the COVID-19 pandemic, most federal student loans have been paused until May 1, 2022, affecting roughly 24 million people. Evidence of the effects of the pandemic on student loan borrowers is still emerging. In this report, we provide a descriptive look at the financial behavior of student loan borrowers during the pandemic pause, relative to nonborrowers. Specifically, we look at the likelihood of obtaining a first mortgage or auto loan during this time. Our results suggest the need for a careful evaluation of the effect of the pandemic student loan pause, and other policies, on student loan borrowers’ finances, homebuying, and wealth.

We find a substantial increase in first-time homebuying among student loan borrowers during the pause, relative to nonborrowers. This increase persists even after controlling for age, credit score, and zip code characteristics. However, this effect is largely driven by student loan borrowers who were in repayment just before the pandemic. Borrowers who were in default before the pandemic were substantially less likely than nonborrowers to obtain a first mortgage during the pause, even after including available controls.

Policies during the pandemic such as federal stimulus payments and expanded social safety net benefits—in addition to the student loan pause–may have stabilized, or improved, some borrowers’ financial standing. But all have faced the risk of COVID-19 infection, the effects of isolation from others, and disruption to employment and workplace environments. Our results suggest that borrowers who were struggling with repayment before the pandemic may still need support after the pause ends.

Research Areas Education Housing finance Wealth and financial well-being
Policy Centers Center on Education Data and Policy