We document changes in the rate at which borrowers repay their student loans by calculating a borrower-level loan paydown rate — the percentage change in outstanding debt relative to debt at repayment entry.

CFI in Focus – Over 40 million Americans currently hold student loans, with an average balance of nearly $40,000 per borrower. As loan balances rise — and particularly during difficult economic times — there is increasing worry about student borrowers’ ability to make payments.

WP 24-08/R – Rising student loan debt and concerns over unaffordable payments provide rationale for “income-driven repayment” (IDR) plans, which aim to protect borrowers from default and resulting financial consequences by linking payments to income.