Another Lesson on Caution in IDR Analysis: Using the 2019 Survey of Consumer Finances to Examine Income-Driven Repayment and Financial Outcomes

This study extends and updates Collier et al. (2020) by using the recently-released Survey of Consumer Finances (SCF) 2019 dataset to explore characteristics of enrollees in Income-Driven Repayment (IDR). The SCF 2019 is more likely than the SCF 2016 dataset to include individuals engaged in the REPAYE program. This analysis generally produced stronger models than did Collier et al. (2020). Our findings support the need to encourage greater participation in IDR by the lowest-income borrowers, and again show greater participation by females than males. As in the prior study, model specification affects findings regarding IDR enrollment; therefore, researchers should exercise caution in their approaches and generate multiple models. REPAYE appears to have widened access to IDR by lowering the debt floor for entry; the binary indicator for ‘high’ debt is no longer significant at ≥$50,000 but is at ≥$40,000. Unlike Collier et al. we found that being enrolled in IDR correlated with a lower amount of money in a traditional checking account and a lower chance of engaging in retirement savings (7-percentage points). We conclude that looking for trends between the former papers and our models provide a fair direction in who may be enrolled in IDR.