Debt Relief and the CARES Act: Which Borrowers Face the Most Financial Strain?

Chakrabarti, Rajashri; Haughwout, Andrew F.; Lee, Donghoon; Nober, William; Scally, Joelle; Van der Klaauw, Wilbert

Discussion Paper

Debt Relief and the CARES Act: Which Borrowers Face the Most Financial Strain?

Abstract: In yesterday's post, we studied the expected debt relief from the CARES Act on mortgagors and student debt borrowers. We now turn our attention to the 63 percent of American borrowers who do not have a mortgage or student loan. These borrowers will not directly benefit from the loan forbearance provisions of the CARES Act, although they may be able to receive some types of leniency that many lenders have voluntarily provided. We ask who these borrowers are, by age, geography, race and income, and how does their financial health compare with other borrowers.

Keywords: COVID-19; CARES Act; forbearance; student loans; mortgage; delinquency; credit scores;

JEL Classification: D14; I14;