JOURNAL ARTICLE

The Labor Market Consequences of Student Loan Forbearance.

  • Published In: Management Science (INFORMS), 2025, v. 71, n. 11. P. 9856 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Hamdi, Naser; Kalda, Ankit; Sovich, David 3 of 3

Abstract

This article investigates the impact of the 2020 federal student loan moratorium, which paused payments on certain federal student loans, on unemployed borrowers' job search outcomes. Using a natural experiment comparing borrowers with Direct Loans (DL) who received forbearance to similar borrowers with Federal Family Education Loans (FFEL) who largely did not, the study finds no economically or statistically significant effects of forbearance on job search durations or subsequent earnings. The analysis also reveals no meaningful heterogeneity in these effects across financial constraints, demographic groups, or labor market characteristics. The findings suggest that the moratorium did not reduce labor supply or create moral hazard, and that any liquidity benefits may have been limited, potentially due to concurrent fiscal stimulus programs during the COVID-19 pandemic.

Additional Information

  • Source:Management Science (INFORMS). 2025/11, Vol. 71, Issue 11, p9856
  • Document Type:Article
  • Subject Area:Education
  • Publication Date:2025
  • ISSN:0025-1909
  • DOI:10.1287/mnsc.2023.04047
  • Accession Number:189064405
  • Copyright Statement:Copyright of Management Science (INFORMS) is the property of INFORMS: Institute for Operations Research & the Management Sciences and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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