Student loan defaults nix free#

Marco Di Maggio & Amir Kermani & Benjamin J.Journal of Economic Perspectives, American Economic Association, vol. ' Student Loans: Do College Students Borrow Too Much-Or Not Enough?,' Christopher Avery & Sarah Turner, 2012.Review of Financial Studies, Society for Financial Studies, vol. ' Lender Screening and the Role of Securitization: Evidence from Prime and Subprime Mortgage Markets,' The Review of Economics and Statistics, MIT Press, vol.

Student loan defaults nix free#

' Can Self-Control Explain Avoiding Free Money? Evidence from Interest-Free Student Loans,' Sumit Agarwal & Gene Amromin & Itzhak Ben-David & Souphala Chomsisengphet & Tomasz Piskorski & Amit Seru, 2012.ġ8311, National Bureau of Economic Research, Inc.WP-2013-27, Federal Reserve Bank of Chicago. Sumit Agarwal & Gene Amromin & Itzhak Ben-David & Souphala Chomsisengphet & Tomasz Piskorski & Amit Seru, 2013.Agarwal, Sumit & Amromin, Gene & Ben-David, Itzhak & Chomsisengphat, Souphala & Piskorski, Tomas & Seru, Amit, 2016.ģ459, Stanford University, Graduate School of Business.Dice Center for Research in Financial Economics. ' Policy Intervention in Debt Renegotiation: Evidence from the Home Affordable Modification Program,'Ģ012-20, Ohio State University, Charles A.

Agarwal, Sumit & Amromin, Gene & Ben-David, Itzhak & Chomsisengphet, Souphala & Piskorski, Tomasz & Seru, Amit, 2012.

The Income Based Repayment (IBR) program introduced by the federal government in the wake of the Great Recession reduced both student loan defaults and their sensitivity to home price fluctuations, thus providing student loan borrowers with valuable insurance against negative shocks. By contrast, when comparing the default sensitivities of homeowners and renters, we find no evidence that falling home prices affect student loan defaults through a home equity-based liquidity channel. Falling home prices affect student loan defaults by impairing individuals’ labor earnings, especially for low income jobs. A Blinder-Oaxaca style decomposition shows that shifts in the composition of student loan borrowers and the massive collapse in home prices during the Great Recession can each account for approximately 30% of the rise in student loan defaults. We examine the rise in student loan defaults in the Great Recession by linking administrative student loan data at the individual borrower level to student loan borrowers’ individual tax records.