Exploring the Relationship of Enrollment in IDR to Borrower Demographics and Financial Outcomes

As federal policymakers consider changes to income-driven repayment (IDR) schemes, research examining the characteristics and financial behaviors of student loan borrowers participating in IDR is necessary. Using the nationally representative Survey of Consumer Finances, we examined the demographics...

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Bibliographic Details
Published inThe Journal of student financial aid Vol. 51; no. 2
Main Authors Collier, Daniel, Fitzpatrick, Dan, Marsicano, Christopher R
Format Journal Article
LanguageEnglish
Published Center for Economic Education at the University of Louisville 21.06.2022
Subjects
Debt (Financial)
Enrollment
Income
Individual Characteristics
Loan Repayment
Money Management
Ownership
Student Loan Programs
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Summary:As federal policymakers consider changes to income-driven repayment (IDR) schemes, research examining the characteristics and financial behaviors of student loan borrowers participating in IDR is necessary. Using the nationally representative Survey of Consumer Finances, we examined the demographics of IDR enrollment. Counter to expectations, low-income borrowers, and borrowers with high debt-to-income ratios are less likely to enroll in IDR. Conditional on having a large amount of debt, married women of color are likely to enroll in IDR programs. Findings concerning IDR participation may be highly sensitive to how groups are defined and what covariates are in models. IDR participation does not predict engagement in other financial behaviors such as retirement savings or homeownership.
ISSN:0884-9153
DOI:10.55504/0884-9153.1740