We study the optimal design of student financial aid as a function of parental income. We derive optimal financial aid … formulas in a general model. For a simple model version, we derive mild conditions on primitives under which poorer students …, labor supply in college, and uncertain returns. Optimal financial aid is strongly declining in parental income even without …

individuals face wage uncertainty. Though optimal labor distortions are history-dependent, i.e. depend on income and education …, simple policy instruments can yield the desired distortions: a single nonlinear labor income tax schedule combinedwith income … in income for this range. This result holds along the Pareto frontier. We compare the second best to a situation where …

optimum. In one implementation there is a common labor income tax schedule, and a repayment schedule for government loans … given out to agents during education. These repayment plans are contingent on loan size and income and capture the history … graduates as a function of income lies first strictly above their counterparts from high-school, but this reverses at higher …

individuals face wage uncertainty. Though optimal labor distortions are history-dependent, i.e. depend on income and education …, simple policy instruments can yield the desired distortions: a single nonlinear labor income tax schedule combined with … income-contingent loans. To take themodel to the (US) data, we simplify the model to a binary education decision (graduating …

optimum. In one implementation there is a common labor income tax schedule, and a repayment schedule for government loans … given out to agents during education. These repayment plans are contingent on loan size and income and capture the history … graduates as a function of income lies first strictly above their counterparts from high-school, but this reverses at higher …