On our campus:
“Borrowing Trouble? Student Loans, the Cost of Borrowing , and Implications for the Effectiveness of Needs-Based Grant Aid”
Ben Marx, Assistant Professor – Department of Economics at Illinois
April 9, 2014 – 12:00pm
IGPA Giertz Conference Room, 1007 West Nevada, Urbana, IL 61801
In this paper, we estimate the impact of need-based grant aid on City University of New York (CUNY) students’ borrowing and educational attainment using regression discontinuity and regression kink designs. Pell Grant aid reduces borrowing: on average, an additional dollar of Pell Grant aid leads to $0.37 reduction in federal loans. Among borrowers, a dollar of Pell Grant aid crowds-out over $1.60 of loans. We develop a simple model that illustrates our findings are consistent with students facing a fixed cost of incurring debt. We show that in the presence of such a fixed cost, additional grant aid may decrease some students’ educational attainment. Empirically, we find no evidence that Pell Grant aid increases educational attainment, and can rule out impacts as small as a $1000 increase in Pell Grant aid leading to an additional 3 credits. Finally, we show that the fixed cost has economically meaningful impacts on behavior: we estimate that relaxing it would increase the borrowing rate by 60 percent.
Please contact Angela Clark Terrall at firstname.lastname@example.org or 217-333-3340 if you would like to schedule a meeting with our speaker or be removed from our email list.
Personal Finance for PhDs: A Guided Q&A with Amy Salo, CFP®
April 9 @ 6:00 PM – 8:00 PM | $20
6:00 – 6:30 PM Wine, hors d’oeuvres, informal networking
6:30 – 7:30 PM Guided Q&A with Amy Salo, CFP®
7:30 – 8:00 PM Informal networking continued
This workshop will focus squarely on the financial concerns of those who have earned, or are in the process of earning, a PhD. Amy will review the three layers of optimal financial balance: protection, savings, and debt management. She will address concerns specific to PhDs, including the crippling effect of over-thinking, opportunity costs, future challenges posed by deferred retirement savings, and the importance of getting your financial priorities right.
There is a finite amount of money flowing through your balance sheet during your working life. We can’t know in advance exactly what that number will be, but we do know that once it is in our rear view mirror, we can’t change it. Amy will help participants move toward a confident, clear path for making the most of opportunities. Money is not created by stress or avoidance. We can only optimize what it is that we are working with, protect it, save it, and always, always make it work for us.