Institutional Affiliation: Federal Reserve Board
|Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being|
with , , , : w27658
Growing reliance on student loans and repayment difficulties have raised concerns of a student debt crisis in the United States. However, 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, together with administrative schooling, earnings, and credit records, to identify the effects of increased student borrowing 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.
|Parental Resources and College Attendance: Evidence from Lottery Wins|
with , , : w22679
We examine more than one million children whose parents won a state lottery to trace out the effect of financial resources on college attendance. The analysis links the universe of federal tax records to federal financial aid records and leverages substantial variation in the size and timing of lottery wins. The results reveal that, while the per-dollar effect is modest (i.e., about 0.6 percentage point for every $100,000 of winnings), the relationship between win size and attendance is only weakly concave, with a high upper bound for amounts that greatly exceed the cost of college. The effects are smaller among lower-SES households, are not sensitive to how early in adolescence the resource shock occurs, and persist through each of the four years after high school. Finally, while addition...