The consequences of student loan credit expansions: Evidence from three decades of default cycles

• 成果类型: Article
• 署名作者: Looney, Adam; Yannelis, Constantine
• 署名单位: Utah System of Higher Education; University of Utah; Brookings Institution; University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.013
• 发表日期: 2022
• 页码: 771-793
• 关键词: Household finance; Credit expansion; human capital; Loan default

摘要

This paper studies the link between credit availability and student loan repayment using administrative federal student loan data. We demonstrate that policy-driven changes in credit available to high-default institutions explain almost all of the historical time-series variation in defaults. Between 1981 and 1988, eligibility for federal loans was expanded, leading to the entry of institutions with borrowers more likely to default. From 1988 to 1992, credit access was tightened, leading to the exit of many institutions with high de-fault rates. After 1992, the cycle was repeated, with credit access gradually loosened by unwinding many of the pre-1992 reforms. (c) 2021 Elsevier B.V. All rights reserved.