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Diane Publishing Books
Student Loans and Repayment: Theory, Evidence and Policy
Lance J. Lochner (au); Alexander Monge-Naranjo (au)
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. The authors 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. They then discuss optimal student credit arrangements that balance three important objectives. They also survey other research related to the optimal design of student loan contracts in imperfect markets. Finally, they provide practical policy guidance for re-designing student loan programs to more efficiently provide insurance while addressing information and commitment frictions in the market. Tables and figures. This is a print on demand report.
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