The market for student loans

Economics

Speaker:Elena Del Rey Canteli, University of Girona
Date: Friday 5 June 2015
Time: 16.15 - 17.45
Location: Bateman Lecture Theatre, Building One

Further details

The education literature acknowledges that both credit and insurance for students are rationed, and generally considers these market failures as given. We propose a model with asymmetric information on student ability and ex-post moral hazard on loan repayment in which these failures arise endogenously. We derive conditions for non-insuring loan contracts and also for contracts including a limited amount of insurance to arise at equilibrium. We also discuss the role of the government in improving the market outcome by means of well known income contingent schemes.

A full copy of the paper can be found here: www.dropbox.com/s/lflxe3n4b2rdc8r/Canteli%20May.pdf