Data and Code for: The Insurance Implications of Government Student Loan Repayment Schemes

Principal Investigator(s): View help for Principal Investigator(s) Martin Gervais, University of Georgia; Qian Liu, Brock University; Lance Lochner, University of Western Ontario

Version: View help for Version V1

Name	File Type	Size	Last Modified
README.pdf	application/pdf	111 KB	12/15/2022 12:20:PM
Repayment Post Default and Post Rehabilitation data.xlsx	application/vnd.openxmlformats-officedocument.spreadsheetml.sheet	43.8 KB	02/28/2023 11:46:AM
calc_amount.do	text/plain	2.5 KB	02/28/2023 12:43:PM
calc_default.do	text/plain	5 KB	02/01/2023 02:00:PM
calc_repay_case3.do	text/plain	8.1 KB	12/15/2022 11:32:AM
calc_repay_other.do	text/plain	7.7 KB	11/27/2022 09:48:AM
calc_repayment_by_calendar_year.do	text/plain	25.9 KB	11/27/2022 10:34:AM
clean_CSLP_repayment.do	text/plain	2.4 KB	02/01/2023 12:59:PM
clean_CSLP_repayment_by_cohort.do	text/plain	12.4 KB	01/10/2023 02:58:PM
clean_PSIS.do	text/plain	7.6 KB	11/26/2022 11:33:AM

Project Citation:

Gervais, Martin, Liu, Qian, and Lochner, Lance. Data and Code for: The Insurance Implications of Government Student Loan Repayment Schemes. Nashville, TN: American Economic Association [publisher], 2023. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2023-04-28. https://doi.org/10.3886/E185601V1

Project Description

Summary: We use new administrative data that links detailed information on Canadian student loan recipients with their repayment and income histories from the Canada Student Loans Program (CSLP), income tax filings, and post-secondary schooling records to measure the extent to which student borrowers adjust loan repayments to insure against income variation. Several mechanisms are available for students to adjust loan repayments in response to income fluctuations: formal, like CSLP's Repayment Assistance Plan; and informal, such as delinquency or default. Borrowers can also make larger payments than required should they experience unexpectedly high income. Indeed, loan payments are shown to increase in income, more so in early years and for individuals with higher initial debt. More formally, we estimate that on average, an unexpected $1,000 change in year-over-year income is associated with a $30 change in loan payment: from a $50 change the year after graduation, declining to a $20 change 5 years after graduation. Loan repayments are also used to absorb income variation that is more permanent in nature: for borrowers whose income is consistently below or above expected income at graduation, the magnitude of average repayment adjustment is similar to the average yearly response.

Funding Sources: Social Sciences and Humanities Research Council (Canada) (435-2018-0024)

Scope of Project

JEL Classification:
      E21 Macroeconomics: Consumption; Saving; Wealth
      G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
      H52 National Government Expenditures and Education
      I22 Educational Finance; Financial Aid

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Published Versions

V1 [2023-04-28]

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