Exploring the Relationship of Enrollment in IDR to Borrower Demographics and Financial Outcomes

33 Pages Posted: 8 Jan 2021 Last revised: 6 Jul 2021

See all articles by Daniel Collier

Daniel Collier

University of Memphis

Dan Fitzpatrick

University of Michigan at Ann Arbor - College of Literature, Science & the Arts

Christopher Marsicano

Davidson College; The College Crisis Initiative (C2i) at Davidson College

Date Written: December 30, 2020

Abstract

As federal policymakers consider changes to income-driven repayment (IDR) schemes, research that examines the characteristics and financial behaviors of student loan borrowers participating in IDR is necessary. Using the nationally representative Survey of Consumer Finances, we examine demographics of IDR enrollment. Counter to expectations, low-income borrowers and borrowers with high debt-to-income ratios are less likely to enroll in IDR. Conditional on having large amount of debt, married women of color are likely to enroll in IDR programs. Research findings concerning IDR participation may be highly sensitive to how groups are defined and what covariates are in models. IDR participation does not predict engagement in other financial behaviors such as retirement savings or home-buying.

Keywords: Student Loan Debt, Income-Driven Repayment, Loans, Homeownership, Savings

JEL Classification: I22, I23, I24, Z18, Z38, H42, I31

Suggested Citation

Collier, Daniel and Fitzpatrick, Dan and Marsicano, Christopher, Exploring the Relationship of Enrollment in IDR to Borrower Demographics and Financial Outcomes (December 30, 2020). Available at SSRN: https://ssrn.com/abstract=3757559 or http://dx.doi.org/10.2139/ssrn.3757559

Daniel Collier (Contact Author)

University of Memphis ( email )

Memphis, TN 38152
Memphis, TN usa 38152-3370
United States

Dan Fitzpatrick

University of Michigan at Ann Arbor - College of Literature, Science & the Arts ( email )

Ann Arbor, MI
United States

Christopher Marsicano

Davidson College ( email )

Davidson College
Box 7124
Davidson, NC 28035-7124
United States
28035-7124 (Fax)

The College Crisis Initiative (C2i) at Davidson College ( email )

Davidson College
Box 7124
Davidson, NC 28035-7124
United States

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