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Student Loans and Borrower Outcomes

Author

Listed:
  • Constantine Yannelis

    (Booth School of Business, University of Chicago, Chicago, Illinois, USA)

  • Greg Tracey

    (Booth School of Business, University of Chicago, Chicago, Illinois, USA)

Abstract

This review surveys the literature on student lending, emphasizing empirical studies of default, credit outcomes, and earnings. Student loans exist to alleviate credit constraints and, in theory, may have different effects on outcomes through multiple channels. There is significant heterogeneity in outcomes across types of borrowers, with many adverse outcomes driven by a subset of primarily for-profit institutions. We conclude by exploring policy options such as student loan forgiveness, income-driven repayment, income-share agreements, and penalizing schools for adverse borrower outcomes. These policies lead to possible equity and efficiency trade-offs.

Suggested Citation

  • Constantine Yannelis & Greg Tracey, 2022. "Student Loans and Borrower Outcomes," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 167-186, November.
    • Handle: RePEc:anr:refeco:v:14:y:2022:p:167-186
    DOI: 10.1146/annurev-financial-111720-092601
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    Citations

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    Cited by:

    1. Catherine, Sylvain & Yannelis, Constantine, 2023. "The distributional effects of student loan forgiveness," Journal of Financial Economics, Elsevier, vol. 147(2), pages 297-316.
    2. Boutros, Michael & Clara, Nuno & Gomes, Francisco, 2024. "Borrow now, pay even later: A quantitative analysis of student debt payment plans," Journal of Financial Economics, Elsevier, vol. 159(C).
    3. Peter Hinrichs, 2024. "How Much Can Families Afford to Pay for College?," NBER Chapters, in: Financing Institutions of Higher Education, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    default; earnings; household finance; student loans;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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