Student Loan Servicers, Policy Disruption, and Credit Outcomes

This project aims to understand the role of federal student loan servicers in borrower credit outcomes.

Student loans are economically important and they can also be complex, especially during periods of policy change and uncertainty. In the U.S., federal student loans are the third largest household balance sheet liability, after mortgages and auto debt. This debt is notoriously difficult for borrowers (with approximately 15% of student loans in default prior to the pandemic-era relief programs). Federal student loans are owned by the government but they are serviced by third party administrators that are in direct contact with borrowers. Servicers provide regular billing and account information and also work with borrowers on payment plans. They were a key source of information for borrowers navigating policy changes during the extended period of federal student loan forbearance that began in March 2020. For data details and policy context, please see earlier work by the same research team.