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Are federal student loan accountability regulations effective?

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  • Lau, Christopher V.

Abstract

Within the education sector, accountability regulations have been used with the intended purpose of improving student outcomes. In higher education, one such regulation aims to improve the ability of borrowers to repay their student loans by placing sanctions on institutions with excessive student loan defaults. This paper examines whether student loan accountability regulations were able to (1) lower student loan defaults, and (2) address the broader objective of improving repayment ability, by exploiting a change to the period in which the regulation’s performance measure was monitored. I find that the change to the regulation resulted in less student loan defaults at for-profit colleges. I also find that this reduction in student loan defaults resulted in a short-term improvement in repayment ability at for-profit, but not nonprofit, institutions.

Suggested Citation

  • Lau, Christopher V., 2020. "Are federal student loan accountability regulations effective?," Economics of Education Review, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:ecoedu:v:75:y:2020:i:c:s0272775719303796
    DOI: 10.1016/j.econedurev.2020.101957
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    References listed on IDEAS

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    1. Gustavo Pereira Serra, 2024. "(Trying to) Catch Up with the Higher-Skilled Joneses: Student loans in a segmented educational market from a Post-Keynesian perspective," Working Papers 2412, New School for Social Research, Department of Economics.

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