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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 ...
Journal Article
Trouble ahead for student loans?
The market for student loans may differ in some respects from other financial markets, but private lenders are the primary source of funds. As in other markets, the incentive to lend those funds comes from the ability to make a profit. But recent turmoil in financial markets is affecting all of the factors that contribute to the profitability of student loans, leading to speculation that the availability of such loans will fall.
Working Paper
Does education loan debt influence household financial distress? An assessment using the 2007-09 SCF Panel
This paper uses the recent 2007-09 SCF panel to examine the influence of student loans on financial distress. Families with student loans in 2007 have higher levels of financial distress than families without such loans, and these families were more susceptible to transitions to financial distress during the early stages of the Great Recession. This correlation persists once we control for a host of other demographic, work-status, and household balance sheet measures. Families with an average level of student loans were 3.1 percentage points more likely to be 60 days late paying bills and 3 ...
Journal Article
Debt and defaults : the growing market - and tab - for student loans
Related links: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2010/q4/feature1_weblinks.cfm
Journal Article
Is student debt jeopardizing the short-term financial health of U.S. households?
In this study, the authors use the Survey of Consumer Finances to determine whether student loans are associated with household net worth. They find that median 2009 net worth ($117,700) for households with no outstanding student loan debt is nearly three times higher than for households with outstanding student loan debt ($42,800). Further, multivariate statistics indicate that households with outstanding student loan debt and a median 2007 net worth of $128,828 incur a loss of about 54 percent of net worth in 2009 compared with households with similar net worth levels but no student loan ...
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 Day Late and a Dollar Short : Liquidity and Household Formation among Student Borrowers
The federal government encourages human capital investment through lending and grant programs, but resources from these programs may also finance non-education activities for students whose liquidity is otherwise restricted. This paper explores this possibility, using administrative data for the universe of federal student loan borrowers linked to tax records. We examine the effects of a sharp discontinuity in program limits?generated by the timing of a student borrower?s 24th birthday?on household formation early in the lifecycle. After demonstrating that this discontinuity induces a jump in ...
Briefing
Turmoil in the student loan market
Recent credit market problems and federal legislation lowering lender revenues have diminished the availability of some types of student loans. Nevertheless, new sources of funding have become available, changing the structure of the market while helping to meet the demand for student loans
Discussion Paper
What Americans (Don’t) Know about Student Loan Collections
U.S. student debt has more than tripled since 2004, and at over $1 trillion is now substantially greater than both credit card and auto debt balances. There are substantial potential benefits to be gained from taking out a student loan to fund a college education, including higher earnings and lower unemployment rates for college grads. However, there are significant costs to having student debt: The loans frequently carry relatively high interest rates, delinquency is common and costly (involving potential late fees and collection fees), and the federal government has the power to garnish ...