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ERIC Number: EJ1230736
Record Type: Journal
Publication Date: 2019
Pages: 25
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-1557-3060
EISSN: N/A
Another Day Another Dollar Metric? An Event History Analysis of Student Loan Repayment
Conzelmann, Johnathan G.; Lacy, T. Austin; Smith, Nichole D.
Education Finance and Policy, v14 n4 p627-651 Fall 2019
Students increasingly borrow money to attend postsecondary education. Yet, little attention in the literature has been paid to the repayment of student loans, aside from failure indicators like default. This study examines a nationally representative sample of bachelor's degree recipients and the time it takes to reach different repayment thresholds on federal student loans. Motivated by a new federal emphasis on student loan repayment rates, we use event history analysis to show that bachelor's degree recipients have little trouble paying down $1 of their principal balance upon entering repayment. After just six months, 65 percent of this student borrower population had already done so, often paying back much more than $1. However, borrowers enrolled in federal Income-Driven Repayment (IDR) plans took much longer to pay down any loan balance, and many never did in the time we observed their repayment. The consistently negative relationship we find between IDR and paying down loan balances highlights a tension between repayment rate policies and the push for IDR reform of the U.S. repayment system. We discuss the policy implications of these findings and offer an alternative repayment metric to accommodate the contrasting goals and structures of standard repayment schedules versus income-contingent repayment policies.
MIT Press. 55 Hayward Street, Cambridge, MA 02142. Tel: 617-253-2889; Fax: 617-253-1709; e-mail: journals-rights@mit.edu; Web site: http://www.mitpressjournals.org/loi/edfp
Publication Type: Journal Articles; Reports - Research
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A