Optimism about Graduation and College Financial AidIndian Rupee

• 成果类型: Article
• 署名作者: Moschini, Emily G.; Raveendranathan, Gajendran; Xu, Ming
• 署名单位: McMaster University; Queens University - Canada
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20230303
• 发表日期: 2026
• 关键词: EDUCATION SUBSIDIES; student loans; RISK; constraints; temptation

摘要

In the United States, college dropout risk is sizable. We provide new empirical evidence that beliefs about the likelihood of earning a bachelor's degree predict college enrollment, and that the distribution of these beliefs exhibits widespread optimism. We incorporate this distribution of beliefs into an overlapping generations model with college as a risky investment that can be financed via federal loans, grants, family transfers, or earnings. We then examine the welfare impact of access to federal student loans. We find that access can reduce welfare for young adults who are low-skilled, poor, and optimistic, due to their mistaken beliefs. (JEL E61, E71, I22, I26, G51)