New JPMorganChase Institute research on the changing landscape of student loan repayments

With student loan repayment having resumed after a long pause for millions of borrowers, new federal policy changes are reshaping household finances. In two new reports released today, the JPMorganChase Institute provides a detailed look at the evolving student loan landscape, examining how new Income-Driven Repayment (IDR) policies and recent trends in overdue payments are influencing borrowers and the broader economy.

A new repayment system changes how borrowers experience student debt:

The Institute's analysis finds that recent federal reforms to IDR will significantly change how borrowers repay their loans.

• Eligibility for repayment assistance remains largely stable, but the new structure of payments and subsidies will help low-income borrowers reduce their balances much faster. Typical balances will fall by about 28 percent after ten years, compared with a 46 percent increase under earlier programs.
• These improvements stem from new principal and interest subsidies that make repayment more manageable each month. Payments will rise slightly for low- and high-income borrowers but stay mostly unchanged for middle-income borrowers.
• Federal revenue from student loans is projected to increase by about five percent compared with pre-pandemic levels, suggesting that the new policy could improve both borrower outcomes and fiscal health.

More overdue payments reveal borrower behavior by income group and potential hurdles:

The companion report finds that the share of borrowers who are overdue has risen above pre-pandemic levels, particularly among higher-income borrowers.

• Despite high-income borrowers having a relatively similar overall financial health, the share of borrowers that are overdue is up 45 percent compared with 2019, suggesting that non-financial factors like communication challenges could be contributing to the increase.
• Delinquent borrowers who continue into default could have their wages garnished. The report findings also show that while most overdue borrowers could adjust to a wage garnishment, nearly one in ten would need to cut essential spending to manage the loss of income.

Together, these reports offer a comprehensive view of the student loan system at a critical moment for borrowers. The findings provide key data for policymakers and lenders working to strengthen repayment systems, improve borrower communication, and ensure the long-term stability of higher education finance.

Media Contact

Shelby Wagenseller, 
Shelby.Wagenseller@jpmchase.com