Honors Theses

Date of Award

2017

Document Type

Undergraduate Thesis

Department

Economics

First Advisor

Mark Van Boening

Relational Format

Dissertation/Thesis

Abstract

Student loan debt and the cost of a college degree are on the rise each year, even as the value of a college degree appears to be stagnant. Yet, little research is available on how the characteristics of student loans create the incentives that have caused this effect. In this paper, I create a two-period, inter-temporal model for examining two related questions. First, what effect do interest rates and the structure of student loans have on individuals' incentives to attend college? Second, how do expectations of graduating high school students about future earnings impact their decision to attend or not attend college? I hope this will begin a discussion on the programs currently available to students to fund a college education. Ultimately, with greater knowledge on how current programs fair in achieving their stated goals of promoting greater educational attainment throughout society, increasing social welfare, lessening the burden of student loan debt, and retaining revenue neutrality in government programs, we can hope for and expect more informed decisions by policy makers on this important topic.

Included in

Economics Commons

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