Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 27, 2021 erstellt
Description:
With a license to use individually identifiable information on student loan borrowers, we find that a majority of distressed student borrowers manage their debt sub-optimally and that suboptimal debt management is associated with higher loan delinquency. Loan mismanagement varies across student gender and ethnicity: it is more prominent among male and non-white students. Such demographic variation can be largely explained by “in-group” altruism on the part of female and white loan servicer representatives, who provide exceptional assistance to borrowers from their own gender and ethnicity group. We test several alternative explanations, based on students’ financial education, overconfidence, consumption preferences, and aversion to administrative paperwork. These factors have some explanatory power but cannot fully explain the demographic variation in student loan management. Overall, we conclude that loan servicer treatment affects student loan outcomes