Search Results
Working Paper
On Intergenerational Immobility : Evidence that Adult Credit Health Reflects the Childhood Environment
Using a novel dataset that links socioeconomic background to future credit, postsecondary education, and federal student loan and grant records, we document that, even though it is not and cannot be used by credit agencies in assigning risk, background is a strong predictor of adult credit health. A relationship remains upon inclusion of achievement, attainment, and debt management metrics. These findings reveal a new dimension along which childhood circumstances persist into adulthood and imply that the many important contexts in which credit scores are relied upon to evaluate individuals ...
Working Paper
Student Loans and Homeownership
We estimate the effect of student loan debt on subsequent homeownership in a uniquely constructed administrative dataset for a nationally representative cohort. We instrument for the amount of individual student debt using changes to the in-state tuition rate at public 4-year colleges in the student's home state. A $1,000 increase in student loan debt lowers the homeownership rate by about 1.5 percentage points for public 4-year college-goers during their mid 20s, equivalent to an average delay of 2.5 months in attaining homeownership. Validity tests suggest that the results are not ...
Working Paper
A Trillion Dollar Question: What Predicts Student Loan Delinquencies?
The recent significant increase in student loan delinquencies has generated interest in understanding the key factors predicting the non-performance of these loans. However, despite the large size of the student loan market, existing analyses have been limited by data. This paper studies predictors of student loan delinquencies using a nationally representative panel dataset that anonymously combines individual credit bureau records with Pell Grant and Federal student loan recipient information, records on college enrollment, graduation and major, and school characteristics. We show that ...
Working Paper
Student Loans, Access to Credit and Consumer Financial Behavior
This paper provides novel evidence that increased student loan debts, caused by rising tuitions, increase borrowers’ demand for additional consumer debt, while simultaneously restricting their ability to access it. The net effect of student loan debt on consumer borrowing varies by market, depending on whether the supply or demand channel dominates. In loosely underwritten credit markets, increased student loan debt causes borrowing to increase, while in tightly underwritten markets, increased student loan debt reduces the use of credit. These findings match predictions of a standard ...
Working Paper
Choices and Implications when Measuring the Local Supply of Prescription Opioids
Despite the growth in the literature on the opioid crisis, questions remain on how to best measure the local supply of prescription opioids. We document that measures based on the number of prescriptions largely track hydrocodone, while measures based on morphine-equivalent amounts largely track oxycodone. This choice matters, given the well-documented link between oxycodone and the rise in use of illicit opioids such as heroin, plus the fact that oxycodone and hydrocodone (the two most common prescription opioids) are only weakly correlated. We recommend local measures of the supply of ...
Working Paper
Implications of Student Loan COVID-19 Pandemic Relief Measures for Families with Children
The initial years of the COVID-19 pandemic and the resulting economic fallout likely posed particular financial strain on U.S. households with children, who faced income disruptions from widespread jobs and hours cuts in addition to new childcare and instruction demands. One common expense for many such households is their student loan payment. The Coronavirus Aid, Relief, and Economic Security (CARES) Act included provisions to curb the impacts of these payments, which have been extended several times. These measures were not targeted and thus applied independent of need. This chapter ...
Working Paper
One Month Longer, One Month Later? Prepayments in the Auto Loan Market
We document a secular trend of increasing auto loan maturity from 30 months to over 70 months during the past 50 years, partly reflecting improved vehicle durability. Analyzing over half of the auto loans originated during the past 16 years, we find that longer-maturity new car loans have significantly higher interest rates with a yield curve much steeper than comparable-maturity Treasury securities. In addition, we show that the majority of auto loans were prepaid, including loans of zero-interest, and that many prepaying borrowers could have paid less interest by choosing loans of a shorter ...
Discussion Paper
Student Loans and Homeownership Trends
The increases in student loan debt and delinquencies over the past few years have raised concerns about whether heavy student loan debt burdens are making it more difficult for young households to become homeowners.
Discussion Paper
A Trillion Dollar Question: What Predicts Student Loan Delinquency Risk?
Over the past ten years, the real amount of student debt owed by American households more than doubled, from about $450 billion to more than $1.1 trillion. As a result of this increase, in 2010 student loan debt surpassed credit card debt as the largest class of non-housing consumer debt.
Discussion Paper
Student Loan Debt and Aggregate Consumption Growth
Although student debt service is undoubtedly a source of severe financial strain for some individuals, in this discussion we show that the direct effect of increased student debt service on aggregate consumption growth is likely small.