Biden’s flip-flopping on student loan promises made borrowers increase discretionary spending, and were 7.5% more likely to default as a result
New research from the National Bureau of Economic Research indicates that President Biden's shifting promises regarding student loan forgiveness led to increased financial instability for borrowers. Those who believed forgiveness was imminent were 7.5 percentage points more likely to become delinquent on their loans by May 2025. This policy whiplash caused some borrowers to reduce their student loan payments and increase discretionary spending, leaving them unprepared when payments resumed without the promised relief. AI
