Repayment Burdens with US College Loans
AbstractThere is a significant and on-going unease with, and debate concerning, the state of US college loans. One of the most important questions relates to so-called “repayment burdens”, the financial difficulties associated with repayments. This paper examines the issue from both theoretical and empirical perspectives, the major goal being to understand the interaction between loan design and occupational choices. We find compelling original evidence that the design of US loans imposes severe expected hardships for many borrowers, especially those with very high debts, such as lawyers. The case for policy reform towards graduates’ capacity to repay seems incontestable.
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Bibliographic InfoPaper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 647.
Date of creation: Nov 2010
Date of revision:
Find related papers by JEL classification:
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
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- Chapman, Bruce & Sinning, Mathias, 2011.
"Student Loan Reforms for German Higher Education: Financing Tuition Fees,"
IZA Discussion Papers
5532, Institute for the Study of Labor (IZA).
- Bruce Chapman & Mathias Sinning, 2010. "Student Loan Reforms for German Higher Education: Financing Tuition Fees," CEPR Discussion Papers 646, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Bruce Chapman & Mathias Sinning, 2011. "Student Loan Reforms for German Higher Education: Financing Tuition Fees," Ruhr Economic Papers 0244, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
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