Repayment Burdens with US College Loans

Bruce Chapman and Kiatanantha Lounkaewa
Authors registered in the RePEc Author Service: Kiatanantha Lounkaew

No 647, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: There is a significant and on-going unease with, and debate concerning, the state of US college loans. One of the most important questions relates to so-called “repayment burdens”, the financial difficulties associated with repayments. This paper examines the issue from both theoretical and empirical perspectives, the major goal being to understand the interaction between loan design and occupational choices. We find compelling original evidence that the design of US loans imposes severe expected hardships for many borrowers, especially those with very high debts, such as lawyers. The case for policy reform towards graduates’ capacity to repay seems incontestable.

JEL-codes: I22 I28 J24 (search for similar items in EconPapers)
Date: 2010-11
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:647

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