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I've been nominated by @benconomics to #TweetABlackEconomistsPaper, so I'll tweet about @danielmangrum's job market paper on financial literacy and student loan repayment
Daniel just graduated from Vanderbilt and will be starting at the NY Fed soon
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Daniel just graduated from Vanderbilt and will be starting at the NY Fed soon
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Research Q:
How does personal financial literacy edu. in high school affect post-college federal student loan repayment?
Method:
Dose-response diff-in-diff
As more states impose ed reqs, unis will have different changes in the % of students who are exposed to treatment
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How does personal financial literacy edu. in high school affect post-college federal student loan repayment?
Method:
Dose-response diff-in-diff
As more states impose ed reqs, unis will have different changes in the % of students who are exposed to treatment
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As shown below, initially Tennessee unis have low % of students exposed to treatment (pctBound)
Vanderbilt is the exception as presumably they have more out-of-state students
Once TN adopts treatment, % of students exposed
at all schools, but by diff. amts.
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Vanderbilt is the exception as presumably they have more out-of-state students
Once TN adopts treatment, % of students exposed
at all schools, but by diff. amts.3/7
Results:
Financial literacy education improves repayment, particularly for first-gen and low-income students at public unis
1st pic: first-gen and low-income students = 5% more likely to make a payment in their 1st year
2nd/3rd pics: but only for students at public unis
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Financial literacy education improves repayment, particularly for first-gen and low-income students at public unis
1st pic: first-gen and low-income students = 5% more likely to make a payment in their 1st year
2nd/3rd pics: but only for students at public unis
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Mechanism:
Students
more knowledgeable about fed student loan regulations
Not due to
1.
loan balances (only high-income students change borrowing behavior)
2. improved overall financial literacy
3. increased likelihood of attending/graduating college
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Students
more knowledgeable about fed student loan regulationsNot due to
1.
loan balances (only high-income students change borrowing behavior)2. improved overall financial literacy
3. increased likelihood of attending/graduating college
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Conclusion:
Familiarizing students w/federal student loan regulations when they take out loans helps them repay the loans in the long run
Alternatively, simplifying the loan process may have similar effects
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Familiarizing students w/federal student loan regulations when they take out loans helps them repay the loans in the long run
Alternatively, simplifying the loan process may have similar effects
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Here is the link to the full paper if you want to learn more:
https://www.danielmangrum.com/docs/PFMandates_current.pdf
And here is a link to his website if you want to learn about his other research!
https://www.danielmangrum.com/home.html
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https://www.danielmangrum.com/docs/PFMandates_current.pdf
And here is a link to his website if you want to learn about his other research!
https://www.danielmangrum.com/home.html
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