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Default and Repayment Among Baccalaureate Degree Earners

Author

Listed:
  • Lance Lochner

    (Department of Economics, University of Western Ontario, Canada; NBER, U.S.A; CESifo, Germany; The Rimini Centre for Economic Analysis, Italy)

  • Alexander Monge-Naranjo

    (Federal Reserve Bank of St. Louis, U.S.A.; Washington University in St. Louis, U.S.A.)

Abstract

More than low default rates, lenders are interested in the expected return on their loans. In this paper, we consider a number of other measures of repayment and nonpayment that are likely to be of direct interest to lenders. Using data from the Baccalaureate and Beyond Longitudinal Study, we document repayment and nonpayment outcomes 10 years after graduation for American students receiving BA/BS degrees in 1993. We estimate differences in these outcomes across individual/family background characteristics, college major, type of institution, the amount borrowed, and post-graduation income. A key contribution is our analysis of the following outcomes in addition to student loan default rates: the fraction of the original undergraduate loan amount repaid as of 2003, nonpayment rates (including deferment and forbearance as well as default), and the fraction of original undergraduate loan amounts on which borrowers defaulted or are currently not repaying.

Suggested Citation

  • Lance Lochner & Alexander Monge-Naranjo, 2015. "Default and Repayment Among Baccalaureate Degree Earners," Working Paper series 15-10, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimwps:15-10
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    References listed on IDEAS

    as
    1. David J. Deming & Claudia Goldin & Lawrence F. Katz, 2012. "The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 139-164, Winter.
    2. Schwartz, S. & Finnie, R., 2002. "Student loans in Canada: an analysis of borrowing and repayment," Economics of Education Review, Elsevier, vol. 21(5), pages 497-512, October.
    3. Barsky R. & Bound J. & Charles K.K. & Lupton J.P., 2002. "Accounting for the Black-White Wealth Gap: A Nonparametric Approach," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 663-673, September.
    4. Lance Lochner & Todd Stinebrickner & Utky Suleymanoglu, 2013. "The Importance of Financial Resources for Student Loan Repayment," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20137, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    5. repec:hka:wpaper:2013-20 is not listed on IDEAS
    6. Dynarski, Mark, 1994. "Who defaults on student loans? Findings from the National Postsecondary Student Aid Study," Economics of Education Review, Elsevier, vol. 13(1), pages 55-68, March.
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    Cited by:

    1. Lance Lochner & Todd Stinebrickner & Utku Suleymanoglu, 2013. "The Importance of Financial Resources for Student Loan Repayment," Working Papers 2013-020, Human Capital and Economic Opportunity Working Group.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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