演講者簡介 : Ms. Chu is currently a Ph.D. student at University of Wisconsin-Madison. Her primary research field is Macroeconomics and minor is Labor Economics.
演講摘要 : Why do student loan borrowers choose to default if they expect the debts cannot be discharged, and the government can garnish wages and social security incomes to repay the defaulted debts? This paper rationalizes defaulting on non-dischargeable debts subject to a strong mechanism of enforcing repayments. I demonstrate that student loan default does not occur under perfect credit markets - this result is in contrast to the literature of unsecured debts default without enforcement technology. Student loan borrowers may choose to default if it is difficult to get loans from credit markets so they substitute taking more new debts with not repaying the existing debts. Finally, a quantitative model is developed to account for the student loan default rate from 1992 to 2012.
