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2014 Conference

April 9–11, 2014

Intercontinental, Milwaukee, WI

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How Much are Students Willing to Borrow for a College Degree?

Thursday, April 10, 2014 at 2:30 PM–4:00 PM Central Time (US & Canada)
Salon A
Short Abstract

Popular media outlets and researchers have questioned the rationality of student borrowing for higher education. We use a human capital model to examine the amount students are willing to borrow to pay for a college degree. Less than 7% of college students are not willing to borrow to pay for school, and the average student is willing to accumulate $31,500 in total student loan debt in order to pay for college. We find that attitudes towards debt have an important role in student willingness to borrow. While several hypothesized relationships are consistent with expectations, we find that several effects have opposite effects. We provide possible explanations for these findings and discuss directions for future research. Overall, we conclude that wage expectations and costs are important considerations in the amount that students are willing to borrow, but that future research needs to clarify student decision making and valuation processes 

First & Corresponding Author

Stuart J Heckman, M.S.,

Add'l Authors In The Order To Be Printed

HanNa Lim, Ph.D., The Ohio State University
Catherine P Montalto, PhD, The Ohio State University