Financially Overextended: College Attendance as a Contributor to Foreclosures During the Great Recession
Jacob W. Faber () and
Peter M. Rich ()
Additional contact information
Jacob W. Faber: New York University
Peter M. Rich: Cornell University
Demography, 2018, vol. 55, issue 5, 1727-1748
Abstract Although subprime mortgage lending and unemployment were largely responsible for the wave of foreclosures during the Great Recession, additional sources of financial risk may have exacerbated the crisis. We hypothesize that many parents sending children to college were financially overextended and vulnerable to foreclosure as the economy contracted. With commuting zone panel data from 2006 to 2011, we show that increasing rates of college attendance across the income distribution in one year predict a foreclosure rate increase in subsequent years, net of fixed characteristics and changes in employment, refinance debt, house prices, and 19-year-old population size. We find similar evidence of college-related foreclosure risk using longitudinal household data from the Panel Study of Income Dynamics. Our findings uncover a previously overlooked dimension of the foreclosure crisis, and highlight mortgage insecurity as an inadvertent consequence of parental investment in higher education.
Keywords: Higher education; College spending; Foreclosure; Great Recession; Parental investments (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s13524-018-0702-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:demogr:v:55:y:2018:i:5:d:10.1007_s13524-018-0702-7
Ordering information: This journal article can be ordered from
Access Statistics for this article
Demography is currently edited by John D. Iceland, Stephen A. Matthews and Jenny Van Hook
More articles in Demography from Springer, Population Association of America (PAA)
Bibliographic data for series maintained by Sonal Shukla ().