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Student Loans and Repayment: Theory, Evidence and Policy
Rising costs of and returns to college have led to sizeable increases in the demand for student loans in many countries. In the U.S., student loan default rates have also risen for recent cohorts as labor market uncertainty and debt levels have increased. We discuss these trends as well as recent evidence on the extent to which students are able to obtain enough credit for college and the extent to which they are able to repay their student debts after. We then discuss optimal student credit arrangements that balance three important objectives: (i) providing credit for students to access ...
The Fed's Discount Window in "Normal" Times
We study new transaction-level data of discount window borrowing in the U.S. from 2010–17, merged with quarterly data on bank financial conditions (balance sheet and revenue). The objective is to improve our understanding of the reasons why banks use the discount window during periods outside financial crises. We also provide a model of the decision of banks to borrow at the window, which is helpful for interpreting the data. We find that decisions to gain access and to borrow at the discount window are meaningfully correlated with some relevant characteristics of banks and the composition ...