The pandemic-era freeze on student debt payments has “dramatically” improved credit scores for Americans who borrowed money to pay for college, the Federal Reserve Bank of New York said.
About 30 million people saw improvements in their risk profile, with the biggest gains going to borrowers who were delinquent before the pandemic, New York Fed economists said in a blog post on Tuesday. They were summarizing the findings of an annual report on U.S. student debt, which exceeds $1.7 trillion in total.
The moratorium on repayments and interest charges for federal student loans has been in place since the pandemic began in early 2020. It’s currently set to expire on Aug. 31, though President Joe Biden’s administration is weighing another extension, as well as a partial debt forgiveness for some borrowers.
