Parental Support, Savings, and Student Loan Repayment

Lance Lochner, Todd Stinebrickner and Utku Suleymanoglu

American Economic Journal: Economic Policy, 2021, vol. 13, issue 1, 329-71

Abstract: Using unique survey and administrative data from Canada, we document that parental support and personal savings substantially reduce student loan repayment problems. Developing a model of student borrowing and repayment, we show that nonmonetary costs of applying for income-based repayment assistance are critical to understanding our findings. Furthermore, we show that eliminating these costs may be inefficient. Empirically, we show that expanding Canada's Repayment Assistance Plan to automatically cover all borrowers could reduce program revenue by half over early repayment years. Finally, we show how student loan programs can be more efficiently designed.

JEL-codes: G51 I22 I23 I28 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/pol.20180401 (application/pdf)
https://www.aeaweb.org/doi/10.1257/pol.20180401.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/pol.20180401.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Parental Support, Savings and Student Loan Repayment (2018)
Working Paper: Parental Support, Savings and Student Loan Repayment (2018)
Working Paper: Parental Support, Savings and Student Loan Repayment (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejpol:v:13:y:2021:i:1:p:329-71

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/pol.20180401

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().