scholarly journals Student Loan Nudges: Experimental Evidence on Borrowing and Educational Attainment

2019 ◽  
Vol 11 (2) ◽  
pp. 108-141 ◽  
Author(s):  
Benjamin M. Marx ◽  
Lesley J. Turner
Keyword(s):  
Educational Attainment ◽  
Experimental Evidence ◽  
Financial Aid ◽  
Student Loans ◽  
Cost Benefit ◽  
Student Loan ◽  
Public Colleges ◽  
Percentage Points ◽  
Choice Sets ◽  
Theoretical Analyses

We provide the first experimental evidence on the effect of student loans on educational attainment. Loan amounts listed in financial aid award letters (“offers”) do not alter students’ choice sets but significantly affect borrowing. Students randomly receiving a nonzero offer were 40 percent more likely to borrow than those who received a $0 offer. Per additional borrower, loans increased by $4,000, GPA and completed credits increased by 30 percent, and transfers to four-year public colleges increased by 11 percentage points. Cost-benefit and theoretical analyses suggest nonzero offers enhance welfare, yet over five million students are not currently offered loans. (JEL D14, D91, I22, I23)

scholarly journals Parents, Partners, Plans and Promises: The Relational Work of Student Loan Borrowing

2019 ◽  
Author(s):  
Abby Stivers ◽  
Elizabeth Popp Berman
Keyword(s):  
Educational Attainment ◽  
Life Course ◽  
Student Loans ◽  
Quantitative Estimation ◽  
Family Members ◽  
Well Being ◽  
Student Loan ◽  
Relational Work ◽  
Economic Well Being ◽  
Debt Levels

When does student loan borrowing prompt relational work between borrowers and their family members? Research on student loans has focused on quantitative estimation of the effects of borrowing on educational attainment, economic well-being, health, and life course milestones. Drawing on sixty interviews with respondents working as lawyers in the northeastern U.S., we argue that student loans also have underappreciated relational effects, even for relatively privileged borrowers. Relational work around student loans is particularly visible during three important moments: the decision to borrow, the decision to partner, and when planning children’s futures. While scholars have examined the effects of borrowing on marriage and childbearing decisions, they have implicitly assumed that it is difficulty repaying that causes such effects. Attention to relational work, however, shows how debt can create additional burdens even when borrowers have the ability to repay, and may help explain why similar debt levels affect different groups differently.

Student loan debt and first-time home buying in USA

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Robert H. Scott III ◽  
Steven Bloom
Keyword(s):  
College Graduates ◽  
Student Loans ◽  
Student Loan ◽  
Home Equity ◽  
Student Loan Debt ◽  
Content Type ◽  
Loan Debt ◽  
The Usa ◽  
First Time ◽  
Home Buying

Purpose This paper aims to examine the relationship between student loan debt and first-time home buying among college graduates aged 23 to 40 years old in the USA. Design/methodology/approach The authors use the Federal Reserve’s 2019 Survey of Consumer Finances data on American households to present descriptive statistics and run logistic regressions that measure the effects of student loan debt on first-time home buying. The authors also present original survey data of mortgage lenders that provides an industry-level perspective. Findings The authors find that having student loan debt does not by itself prohibit first-time home buyers. On the contrary, having student loan debt increases the likelihood of homeownership by 15.1%. People with student loan debt, however, buy homes that are 39.2% less expensive and have 58% less home equity compared to first-time home buyers without student loans. In addition, it is found that the amount of student loan debt is important. People with student loan debt above the median amount among people with student loan debt ($35,000) are 27% less likely to be first-time home buyers. Practical implications This paper provides public policy analysts and other researchers a different perspective on the correlation between student loan debt and home buying. This study focuses narrowly on first-time home buyers who are college graduates between 23 and 40 years. Thus, capturing the youngest cohort of first-time home buyers and examine the primary factors that influence their home buying decisions. Originality/value First-time homebuyers are historically the largest segment of home buyers making them an important subcategory to study. The rise in student loan debt is posited to explain declining homeownership among younger people. The current literature on student loan debt and home buying often studies samples that are too heterogeneous resulting in mixed findings. This paper adds to the existing literature by filtering the sample to study the effects of student loan debt and first-time home buying among people with at least a college degree who are between 23 and 40 years.

scholarly journals Financial literacy and retirement planning in Canada

2015 ◽  
Vol 16 (3) ◽  
pp. 277-296 ◽  
Author(s):  
DAVID BOISCLAIR ◽  
ANNAMARIA LUSARDI ◽  
PIERRE-CARL MICHAUD
Keyword(s):  
Educational Attainment ◽  
Financial Literacy ◽  
Retirement Planning ◽  
Retirement Savings ◽  
Risk Diversification ◽  
Percentage Points ◽  
Lower Educational Attainment

AbstractIn this paper, we draw on internationally comparable survey evidence on financial literacy and retirement planning in Canada to investigate how financially literate Canadians are and how financial literacy is linked to retirement planning. We find that 42% of respondents are able to correctly answer three simple questions measuring knowledge of interest compounding, inflation, and risk diversification. This is consistent with evidence from other countries, and Canadians perform relatively well in comparison with Americans but worse than individuals in other countries, such as Germany. Among Canadian respondents, the young and the old, women, minorities, and those with lower educational attainment do worse, a pattern that has been consistently found in other countries as well. Retirement planning is strongly associated with financial literacy; those who responded correctly to all three financial literacy questions are 10 percentage points more likely to have retirement savings.

scholarly journals Student Loans Financing in Tanza:

2021 ◽  
Vol 8 (1) ◽  
pp. 91-115
Author(s):  
Hillary A. Dachi
Keyword(s):  
Higher Education ◽  
Low Income ◽  
Higher Education Policy ◽  
Student Loans ◽  
Student Loan ◽  
Education Student ◽  
Means Testing ◽  
The Public ◽  
Policy Objectives ◽  
Financing Higher Education

This study examined the mechanisms employed to finance student loans in Tanzania and who benefits and how. The findings show that student loans are financed by the public exchequer. The number of students fromhigh-income families accessing these loans is disproportionate to their representation in Higher Education Institutions, while the share for middle and low-income students reflects their representation. There is also animbalance between male and female beneficiaries across programmes, notably in the Science, Technology, Engineering, and Math (STEM) disciplines. It is concluded that such disparities are the result of the fact thatthe student loan scheme seeks to satisfy a number of government policy objectives in relation to higher education beyond access and equity, and that means testing is not rigorously conducted. Key words: Higher Education, higher education policy, financing higher education, higher education student loans, public subsidisation of higher education

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