This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. May 2015
  5. Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile

Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile

  • Harald Beyer
  • Justine Hastings
  • Christopher Neilson
  • Seth Zimmerman
American Economic Review
vol. 105, no. 5, May 2015
(pp. 508-13)
Download Full Text PDF

Abstract

Rising student loan default rates and protests over debt suggest that many students make college enrollment and financing choices they regret. Policymakers have considered tying the availability of federally subsidized loans at degree programs to financial outcomes for past students. This paper considers the implementation of such a policy in Chile. We describe how loan repayment varied by degree type at baseline, the design of the loan reform, and how earnings-based loan caps change availability of loans and incentives for students and higher education institutions. We discuss the challenges facing policymakers seeking to link loan availability to earnings outcomes.

Citation

Beyer, Harald, Justine Hastings, Christopher Neilson, and Seth Zimmerman. 2015. "Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile." American Economic Review, 105 (5): 508-13. DOI: 10.1257/aer.p20151026

Additional Materials

JEL Classification

  • D14 Household Saving; Personal Finance
  • I22 Educational Finance; Financial Aid
  • I23 Higher Education; Research Institutions
  • I26 Returns to Education
  • J31 Wage Level and Structure; Wage Differentials
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration