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Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being

Sandra Black (), Jeffrey Denning (), Lisa Dettling, Sarena Goodman and Lesley Turner

No 27658, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: D14 H52 H81 I21 I22 I23 I26 I28 J24 (search for similar items in EconPapers)
Date: 2020-08
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