A new research paper underscores the importance of evaluating whether the most vulnerable and distressed borrowers need longer term repayment plans soon after they first enroll in natural disaster or other emergency relief programs with credit card lenders.
FinRegLab today issued a research brief entitled “The Countdown Clock for Student Loan Forbearances” that highlights the need for quick action by consumers, federal agencies, servicers, and counselors to prepare for the August 2023 end of pandemic-era forbearances on federal student loans.
A new study finds that more consumers obtained short-term payment relief on their credit cards during the first 18 months of the pandemic than on any other type of loan except student debt, where forbearances were mandated by federal law. The study also finds evidence that pandemic relief initiatives may have reduced damage to the credit reports of consumers who sought long-term assistance through credit counseling and debt management programs.
FinRegLab has launched a new research project using data from the National Foundation for Credit Counseling (NFCC) to evaluate ways to help consumers recover more quickly from personal and economic crises such as COVID-19. The project will analyze pilot initiatives by nonprofit counseling agencies and other data sources as a springboard for considering broader market and policy changes.