Office of Economic Policy
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Institutional Affiliation: U.S. Department of Treasury
NBER Working Papers and Publications
|February 2017||Measuring Loan Outcomes at Postsecondary Institutions: Cohort Repayment Rates as an Indicator of Student Success and Institutional Accountability|
with Adam Looney, Tara Watson: w23118
Low- and middle-income college borrowers often struggle with economic opportunity and loan burdens after leaving school. However, some institutions, including some non-selective schools, do a good job of providing economic mobility to low-income students. This implies that there is scope for a policy to redirect loan dollars – and therefore students – from low-performing schools to higher-performing ones. Here we define a particular metric of institutional loan performance, the cohort repayment rate, and describe its distribution. We demonstrate that the cohort repayment rate is correlated with other institutional outcomes of interest, and thus could be used as an institutional accountability tool.