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Measuring student debt and its performance

Author

Listed:
  • Lee, Donghoon

    () (Federal Reserve Bank of New York)

  • Van der Klaauw, Wilbert

    () (Federal Reserve Bank of New York)

  • Haughwout, Andrew F.

    (Federal Reserve Bank of New York)

  • Brown, Meta

    (Federal Reserve Bank of New York)

  • Scally, Joelle

    (Federal Reserve Bank of New York)

Abstract

Studies continue to indicate that higher education is frequently a worthwhile investment for individuals and that it raises the productivity of the workforce as a whole. While the rising cost of post-secondary education has not eliminated this "college premium," it has raised new questions about how growing numbers of students can make these investments. One solution to this problem is student loans, which have come to play an increasingly important role in financing higher education. Yet, despite its importance, educational debt is not well understood. Among the reasons is that there exist few central repositories of information on the characteristics and performance of all student loans, which currently include loans made by both government and private lenders. In this paper, we bring a new data set to bear on this important issue and present a brief analysis of the historical and current levels of student debt and how those loans are performing. We also briefly discuss the implications of student loans for borrowers and the economy.

Suggested Citation

  • Lee, Donghoon & Van der Klaauw, Wilbert & Haughwout, Andrew F. & Brown, Meta & Scally, Joelle, 2014. "Measuring student debt and its performance," Staff Reports 668, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:668
    as

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    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr668.pdf
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    References listed on IDEAS

    as
    1. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
    2. Archibald, Robert B. & Feldman, David H., 2014. "Why Does College Cost So Much?," OUP Catalogue, Oxford University Press, number 9780190214104.
    3. Meta Brown & Andrew F. Haughwout & Donghoon Lee & Wilbert Van der Klaauw, 2013. "The financial crisis at the kitchen table: trends in household debt and credit," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 19(April).
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Investing in College
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2014-09-25 17:31:05

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Ionescu, Felicia & Simpson, Nicole, 2016. "Default risk and private student loans: Implications for higher education policies," Journal of Economic Dynamics and Control, Elsevier, vol. 64(C), pages 119-147.
    2. Lochner, Lance & Monge-Naranjo, Alexander, 2014. "Student Loans and Repayment: Theory, Evidence and Policy," Working Papers 2014-40, Federal Reserve Bank of St. Louis, revised 12 Nov 2014.
    3. Despard, Mathieu R. & Perantie, Dana & Taylor, Samuel & Grinstein-Weiss, Michal & Friedline, Terri & Raghavan, Ramesh, 2016. "Student debt and hardship: Evidence from a large sample of low- and moderate-income households," Children and Youth Services Review, Elsevier, vol. 70(C), pages 8-18.
    4. William H. Rogers & Anne E. Winkler, 2014. "How Did the Housing and Labor Market Crises Affect Young Adults' Living Arrangements?," Working Papers 1005, University of Missouri-St. Louis, Department of Economics.
    5. Monge-Naranjo, Alexander, 2014. "What’s behind—and beyond—the default rate on student loans?," Economic Synopses, Federal Reserve Bank of St. Louis, issue 14.
    6. Ambrose, Brent W. & Cordell, Lawrence R. & Ma, Shuwei, 2015. "The impact of student loan debt on small business formation," Working Papers 15-26, Federal Reserve Bank of Philadelphia.
    7. Monge-Naranjo, Alexander, 2014. "Recent trends in student loans: more loans and higher balances," Economic Synopses, Federal Reserve Bank of St. Louis, issue 12.
    8. repec:spr:reihed:v:59:y:2018:i:3:d:10.1007_s11162-017-9471-1 is not listed on IDEAS
    9. Rogers, William H. & Winkler, Anne E., 2014. "How Did the Housing and Labor Market Crises Affect Young Adults' Living Arrangements?," IZA Discussion Papers 8568, Institute for the Study of Labor (IZA).
    10. Bleemer, Zachary & Brown, Meta & Lee, Donghoon & Strair, Katherine & Van der Klaauw, Wilbert, 2017. "Echoes of rising tuition in students’ borrowing, educational attainment, and homeownership in post-recession America," Staff Reports 820, Federal Reserve Bank of New York.
    11. Cooper, Daniel H. & Wang, J. Christina, 2014. "Student loan debt and economic outcomes," Current Policy Perspectives 14-7, Federal Reserve Bank of Boston.

    More about this item

    Keywords

    student debt; household debt;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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