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While there has been a substantial increase in the return to college (the college premium), college attainment has stagnated. We show that these facts can be reconciled by allowing for uncertainty in college payoffs, in particular around college completion and earnings, with borrowing. With...
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The decision to attend college is a question of human capital investment. However, resources to help practitioners frame human capital investment decisions remain elusive and few include the “gold standard” of finance: Net Present Value (NPV). Can one discuss human capital investment with an...
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To borrow for college is to take a risk. Indebted students may not earn enough to repay their loans after they graduate … or, worse, fail to graduate. For students who cannot pay for college without borrowing, this risk is both a disincentive …
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