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Student Loan Debt: Causes and Consequences

Wu, Xue
http://rave.ohiolink.edu/etdc/view?acc_num=osu1429828545

Abstract Details

2015, Doctor of Philosophy, Ohio State University, Economics.
This dissertation employs data from the National Longitudinal Survey of Youth (NLSY97) and data from the Consumer Finance Monthly (CFM) to empirically investigate the causes and consequences of rising student loan debt in recent years and evaluate the new initiatives in the White House’s latest budget proposal which aim at easing Americans’ student loan debt burden. Chapter 3 examines the relationship between student loan debt and post-graduation living arrangements for college graduates in the United States, taking labor market factors into account. Using data from NLSY97, I explore both the parent-youth co-residence outcomes at a point in time and the dynamics of college graduates' movements back home. I estimate a random effects panel probit model and a discrete time proportional hazard model. The estimation results show that an increase in the amount of student loan debt owed at the time of graduation significantly increases the hazard of moving back home after graduation. Chapter 4 uses NLSY97 data to investigate the factors that affect the amount of educational loans students borrow to attend college, with a particular interest in whether parental divorce would affect a college student’s educational debt burden. The estimation results indicate that youths from divorced families are more likely to have a higher debt burden upon leaving school than youths from intact families. Among the youths from divorced families, those whose biological parents lived in states that permit courts to extend child support beyond the age of 18 for college expenses (post-majority states) do not seem to take fewer loans than those whose biological parents lived in non-post-majority states. Chapter 5 evaluates the new initiatives in the White House’s latest budget proposal which aim at easing Americans’ student loan debt burden. The new initiatives would enable a greater number of Americans with federal student loans to enroll in the income-based repayment program known as “Pay as You Earn” program (PAYE). I examine the costs of this plan in depth. I use data from CFM, a survey which contains extensive information on household debt and credit, interest rates of repayment, expectations and attitudes. I find that more than 10 percent of borrowers in my sample will receive loan forgiveness after they make regular payments for 20 years under the PAYE program. Projecting to the total U.S. population, this program would result in a great amount of student loan debt forgiveness.
Lucia Dunn (Advisor)
Stephen Cosslett (Committee Member)
Trevon Logan (Committee Member)
105 p.
Economics

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Citations

  • Wu, X. (2015). Student Loan Debt: Causes and Consequences [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1429828545

    APA Style (7th edition)

  • Wu, Xue. Student Loan Debt: Causes and Consequences. 2015. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1429828545.

    MLA Style (8th edition)

  • Wu, Xue. "Student Loan Debt: Causes and Consequences." Doctoral dissertation, Ohio State University, 2015. http://rave.ohiolink.edu/etdc/view?acc_num=osu1429828545

    Chicago Manual of Style (17th edition)

osu1429828545
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This open access ETD is published by The Ohio State University and OhioLINK.