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Measuring student debt and its performance

Author

Listed:
  • Meta Brown
  • Andrew F. Haughwout
  • Donghoon Lee
  • Joelle Scally
  • Wilbert Van der Klaauw

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

  • Meta Brown & Andrew F. Haughwout & Donghoon Lee & Joelle Scally & Wilbert Van der Klaauw, 2014. "Measuring student debt and its performance," Staff Reports 668, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:668
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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).
    4. 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).
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    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

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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. Lance Lochner & Alexander Monge-Naranjo, 2014. "Student Loans and Repayment: Theory, Evidence and Policy," Working Papers 2014-40, Federal Reserve Bank of St. Louis, revised 12 Nov 2014.
    3. Looney, Adam & Yannelis, Constantine, 2019. "How useful are default rates? Borrowers with large balances and student loan repayment," Economics of Education Review, Elsevier, vol. 71(C), pages 135-145.
    4. Marco Di Maggio & Ankit Kalda & Vincent Yao, 2019. "Second Chance: Life without Student Debt," NBER Working Papers 25810, National Bureau of Economic Research, Inc.
    5. Rajashri Chakrabarti & Vyacheslav Fos & Andres Liberman & Constantine Yannelis, 2020. "Tuition, Debt, and Human Capital," Staff Reports 87439, Federal Reserve Bank of New York.
    6. 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.
    7. Alexander Monge-Naranjo, 2014. "What’s behind—and beyond—the default rate on student loans?," Economic Synopses, Federal Reserve Bank of St. Louis, issue 14.
    8. Alexander Monge-Naranjo, 2014. "Recent trends in student loans: more loans and higher balances," Economic Synopses, Federal Reserve Bank of St. Louis, issue 12.
    9. 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.
    10. Daniel H. Cooper & J. Christina Wang, 2014. "Student loan debt and economic outcomes," Current Policy Perspectives 14-7, Federal Reserve Bank of Boston.
    11. Brent W. Ambrose & Lawrence R. Cordell & Shuwei Ma, 2015. "The impact of student loan debt on small business formation," Working Papers 15-26, Federal Reserve Bank of Philadelphia, revised 01 Jul 2015.
    12. Serge Herzog, 2018. "Financial Aid and College Persistence: Do Student Loans Help or Hurt?," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(3), pages 273-301, May.
    13. Zachary Bleemer & Meta Brown & Donghoon Lee & Katherine Strair & Wilbert Van der Klaauw, 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.

    More about this item

    Keywords

    student debt; household debt;

    JEL classification:

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

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