The Impact of College Financial Aid Rules on Household Portfolio Choice
Using the 2001 Survey of Consumer Finances, this study investigates the effect of the college financial aid rules on household portfolio choices. The federal algorithm used to compute financial aid does not take into consideration assets accumulated in retirement accounts or as home equity, and households can reduce their implicit marginal financial aid tax rates by moving funds into retirement accounts or by increasing their home equity. Our results show that households who have higher marginal financial aid tax rates have a larger fraction of their portfolios invested in retirement assets and home equity, relative to taxable assets.
Volume (Year): 62 (2009)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: 529 14th Street NW Suite 750, Washington DC 20045|
Web page: https://www.ntanet.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:62:y:2009:i:4:p:635-55. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ann Crampton)
If references are entirely missing, you can add them using this form.