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Working Paper
The Effect of the Great Recession on Student Loan Borrowing and Repayment
We study the long-term effect of the Great Recession on federal student loan borrowing and repayment. Using detailed longitudinal data on federal student loan borrowers, we compare labor markets that faced varying degrees of unemployment severity during the economic downturn. On average, a one percentage point increase in Great Recession unemployment rates caused a 7% rise in total outstanding debt and 6% percent rise in defaulted borrowers. Across institutional sectors, the Great Recession accounted on average for between 19-32% of the total increase in undergraduate student debt and 10 25% ...