The Impact of Income-Driven Repayment on Student Borrower Outcomes

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


In the United States, most student loans follow a fixed payment schedule that falls early in borrowers’ careers. This structure provides no insurance against earnings risk and may increase student loan defaults. Income-driven repayment (IDR) plans are designed to help distressed student borrowers by lowering their monthly payments to a share of income. Using random variation in a loan servicer’s automatic dialing system, I find that IDR reduces delinquencies by 22 percentage points and decreases outstanding balances within eight months of take-up. I find suggestive long-run impacts on borrower credit scores, mortgage-holding rates, and other measures of financial health.

Original languageEnglish (US)
Pages (from-to)1-25
Number of pages25
JournalAmerican Economic Journal: Applied Economics
Issue number1
StatePublished - 2023

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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