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Discussion Paper
Federal Student Loan Servicing Accountability and Incentives in Contracts
Student loan servicers play a critical and underappreciated role in federal student oan programs. The federal government contracts out to servicers an array of many of the most critical functions related to student loan repayment, including account management, payment processing, and the provision of information about payment plans and solutions for distressed borrowers. In fact, most borrowers’ interactions with federal student loan repayment are almost exclusively with their servicer. We aim to improve upon the scarce research literature about federal student loan servicers by exploring ...
Report
Information heterogeneity and intended college enrollment
Despite a robust college premium, college attendance rates in the United States have remained stagnant and exhibit a substantial socioeconomic gradient. We focus on information gaps? specifically, incomplete information about college benefits and costs?as a potential explanation for these patterns. In a nationally representative survey of U.S. household heads, we show that perceptions of college costs and benefits are severely and systematically biased: 74 percent of our respondents underestimate the true benefits of college (average earnings of a college graduate relative to a non-college ...
Working Paper
WHERE DO STUDENTS GO WHEN FOR-PROFIT COLLEGES LOSE FEDERAL AID?
Recent federal investigations and new regulations have resulted in restrictions on for-profit institutions? access to federal student aid. We examine the enrollment effects of similar restrictions imposed on over 1,200 for-profit colleges in the 1990s. Using variation in regulations linked to student loan default rates, we estimate the impact of the loss of federal aid on the enrollment of Pell Grant recipients in sanctioned institutions and their local competitors. Enrollment in a sanctioned for-profit college declines by 53 percent in the five years following a sanction. For-profit ...
Report
Precarious slopes? The Great Recession, federal stimulus, and New Jersey schools
While sparse literature exists investigating the impact of the Great Recession on various sectors of the economy, there is virtually no research that studies the effect of the Great Recession, or past recessions, on schools. This paper starts to fill the void. Studying school funding during the recession is of paramount importance because schools have a fundamental role in fostering human capital formation and economic growth. We exploit unique panel-data and trend-shift analysis to analyze how New Jersey school finances were affected during the Great Recession and the ARRA federal stimulus ...
Journal Article
The Great Recession’s impact on school district finances in New York State
A slowly emerging literature explores the effects of the Great Recession on different parts of the economy; however, very little research examines the impact of the Great Recession (or any other recession) on schools. Given the fundamental role of education in human capital formation and growth, understanding the effect of recessions on schools is essential. This article contributes to filling this gap. Exploiting detailed panel data on a multitude of school finance indicators and a trend shift analysis, it examines how the Great Recession affected school finances in New York State. While it ...
Working Paper
An Empirical Analysis of Racial Segregation in Higher Education
This descriptive paper documents how segregation between blacks and whites across colleges in the United States has evolved since the 1960s. It also explores potential channels through which changes are occurring, and it uses recent data to study the issue of segregation within colleges. The main findings are as follows: (1) White exposure to blacks has been rising since the 1960s, whereas black exposure to whites increased sharply in the late 1960s and early 1970s and has fluctuated since then. Meanwhile, black-white dissimilarity and the Theil index fell sharply in the late 1960s and early ...
Working Paper
The impact of student loan debt on small business formation
Small businesses are the backbone of the U.S. economy and account for approximately one-half of the private-sector economy and 99% of all businesses. To start a small business, individuals need access to capital. Given the importance of an entrepreneur?s personal debt capacity in financing a startup business, student loan debt, which is difficult to discharge via bankruptcy, can have lasting effects and may have an impact on the ability of future small business owners to raise capital. This study examines the impact of the growth in student debt on net small business formation. We find a ...
Report
Can increasing private school participation and monetary loss in a voucher program affect public school performance? Evidence from Milwaukee
The Milwaukee voucher program, as implemented in 1990, allowed only nonsectarian private schools to participate in the program. However, following a Wisconsin Supreme Court ruling, the program was expanded to include religious private schools in 1998. This second phase of the voucher program led to more than a three-fold increase in the number of private schools and almost a four-fold increase in the number of choice students. Moreover, because of some changes in funding provisions, the revenue loss per student from vouchers increased in the second phase of the program. This paper analyzes, ...
Journal Article
The Unequal Responses to Pandemic-Induced Schooling Shocks
This article investigates the existence of socio-demographic gradients in the schooling shocks experienced by school-aged children and their ability to adjust to the disruptions induced by the containment measures imposed in response to the COVID-19 pandemic. It focuses on documenting racial, educational, and income disparities in these two essential components of children's human capital accumulation that could have significant implications in the medium and long run. The article finds that children in households from disadvantaged socio-demographic groups (i) were significantly more likely ...
Working Paper
Affirmative Action and Racial Segregation
Prior research suggests that statewide affirmative action bans reduce minority enrollment at selective colleges while leaving overall minority college enrollment unchanged. However, the effect of these bans on across-college racial segregation has not yet been estimated. This effect is theoretically ambiguous due to a U-shaped relationship across colleges between minority enrollment and college selectivity. This paper uses variation in the timing of affirmative action bans across states to estimate their effects on racial segregation as measured by standard exposure and dissimilarity indexes, ...