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Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being

Author

Listed:
  • Black, Sandra E.

    (University of Texas at Austin)

  • Denning, Jeffrey T.

    (University of Texas at Austin)

  • Dettling, Lisa J.

    (Federal Reserve Board of Governors)

  • Goodman, Sarena

    (Federal Reserve Board of Governors)

  • Turner, Lesley J.

    (Harris School, University of Chicago)

Abstract

Growing reliance on student loans and repayment difficulties have raised concerns of a student debt crisis in the United States, but little is known about the effects of student borrowing on human capital and long-run financial well-being. We use variation induced by recent expansions in federal loan limits combined with administrative datasets to identify the effects of increased access to student loans on credit-constrained students' educational attainment, earnings, debt, and loan repayment. Increased student loan availability raises student debt and improves degree completion, later-life earnings, and student loan repayment while having no effect on homeownership or other types of debt.

Suggested Citation

  • Black, Sandra E. & Denning, Jeffrey T. & Dettling, Lisa J. & Goodman, Sarena & Turner, Lesley J., 2023. "Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being," IZA Discussion Papers 15874, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15874
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    Keywords

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    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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