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Educational Debt Burden and Career Choice: Evidence from a Financial Aid Experiment at NYU Law School

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  • Erica Field

Abstract

This paper examines the influence of psychological responses to debt on career choices from an experiment in which alternative financial aid packages were assigned by lottery to a set of law school admits. The packages had equivalent monetary value, but one required the student to take on a loan that would be paid for by the school if he worked in public interest law, while the other covered tuition as long as the student worked in public interest law. If he did not, the student would be required to reimburse the school. Tuition assistance recipients have a 36 to 45 percent higher public interest placement rate and, when lottery results were announced before enrollment, were twice as likely to enroll. (JEL I21, I22, J44, D14)

Suggested Citation

  • Erica Field, 2009. "Educational Debt Burden and Career Choice: Evidence from a Financial Aid Experiment at NYU Law School," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 1-21, January.
  • Handle: RePEc:aea:aejapp:v:1:y:2009:i:1:p:1-21
    Note: DOI: 10.1257/app.1.1.1
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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