highereddata/administrative-burden-and-student-loans

By Adam Goldstein, Charlie Eaton, Parijat Chakrabarti, Jeremy Cohen, Katie Donnelly ** DATA: CFPB Complaint DataHub Data * UC Consumer Credit Panel * BPS Federal Student Aid Supplement * Survey of Consumer Finance * ACS Census Block Data on Race and Income

Administrative Burden in Federal Student Loan Repayment, and Socially Stratified Access to Income-Driven Repayment Plans

Adam Goldstein, Charlie Eaton, Parijat Chakrabarti, Jeremy Cohen, Katie Donnelly

The study considers socially stratified take-up of income-driven repayment plans among federal student loan borrowers with high debt payment burdens.

Qualitative analysis of borrower complaints from the Consumer Financial Protection Bureau are used to document the administrative burdens that pervade borrowers’ experiences of federal student loan repayment. The authors then quantify the combined effects high administrative burden on social stratification of access to federal payment relief programs using administrative data from a 1% national sample of consumer credit reports spanning 2010-2019. Socio-economic and racial gaps in take-up of income-driven repayment plans (IDR) are estimated among the subset of borrowers who would face high loan payment-to-income ratios under a standard repayment plan, for whom IDR participation would likely be most advantageous. Regression models indicate that among these highly debt-burdened borrowers, those residing in lower income and higher Black census blocks are less likely to be enrolled in IDR.