Tuesday, August 21st, 2012 8:05 pm

Student Loans

Question A: Loans to students attending for-profit colleges are especially risky because students attending them have had default rates that greatly exceed those for comparable students attending public and non-profit private institutions.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question B: Rules that tie each college's eligibility for federal student loans to its students' graduation rates and post-schooling employment outcomes would better protect taxpayers from losses on student loans.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Agree 4
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 8 Bio/Vote History
         
Auerbach Alan Auerbach Berkeley No Opinion
Bio/Vote History
         
Autor David Autor MIT Strongly Agree 10
See Deming, Goldin and Katz 2012 in Journal of Economic Perspectives
-see background information here
Bio/Vote History
         
Baicker Katherine Baicker Chicago Agree 3
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 3
Bio/Vote History
         
Chetty Raj Chetty Stanford Agree 7
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 9 Bio/Vote History
         
Currie Janet Currie Princeton Agree 7
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 1
Bio/Vote History
         
Deaton Angus Deaton Princeton Disagree 5
Seems misphrased. Surely not "because"? Rather than both consequences of other factors
Bio/Vote History
         
Duffie Darrell Duffie Stanford No Opinion
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 9
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 5
Bio/Vote History
         
Fair Ray Fair Yale Agree 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale No Opinion
Bio/Vote History
         
Goldin Claudia Goldin Harvard Strongly Agree 10
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Strongly Agree 9
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Did Not Answer
Bio/Vote History
         
Hall Robert Hall Stanford Did Not Answer
Bio/Vote History
         
Holmström Bengt Holmström MIT Did Not Answer
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 7
Perhaps these students were high default risks no matter what schools they attended. Cannot infer causation from correlation.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 7
Bio/Vote History
         
Klenow Pete Klenow Stanford Strongly Agree 4 Bio/Vote History
         
Lazear Edward Lazear Stanford Did Not Answer
Bio/Vote History
         
Levin Jonathan Levin Stanford Agree 3
Agreeing with some caution: default rates are higher on average (see link), but don't know the evidence on whether students are comparable.
-see background information here
Bio/Vote History
         
Maskin Eric Maskin Harvard Uncertain 7
Depends on whether the characteristics leading a student to default are observable and independent of attendance at a for-profit school.
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 5
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley No Opinion
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 2
Bio/Vote History
         
Scheinkman José Scheinkman Princeton No Opinion
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 3
Haven't seen numbers except in the press; don't understand the nature of "default" here.
Bio/Vote History
         
Shin Hyun Song Shin Princeton Uncertain 3
Bio/Vote History
         
Stokey Nancy Stokey Chicago No Opinion
Bio/Vote History
         
Thaler Richard Thaler Chicago No Opinion
Presumes facts that I do not know to be true.
Bio/Vote History
         
Udry Christopher Udry Yale Uncertain 1
I don't know of work that has been able to compare default for "comparable students"; the pools attending are very different.
Bio/Vote History
         
Zingales Luigi Zingales Chicago No Opinion
If the fact is correct ( I do not know ) I agree
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Agree 6
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 7
A tie to default rates would also help.
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley No Opinion
Bio/Vote History
         
Autor David Autor MIT Strongly Agree 10
Bio/Vote History
         
Baicker Katherine Baicker Chicago Uncertain 3
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 3
Bio/Vote History
         
Chetty Raj Chetty Stanford Agree 7
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 9
The government is now residual claimant for the school's activities. There may be alternative ways to do this.
Bio/Vote History
         
Currie Janet Currie Princeton Agree 7
Bio/Vote History
         
Cutler David Cutler Harvard Agree 4
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 4
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 1
Sounds reasonable that loans should not be provided if they are not having a sufficiently good measured impact.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 7
Note though that high graduation rates may be manipulable.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 5
Bio/Vote History
         
Fair Ray Fair Yale Agree 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Uncertain 1
Outcomes need to be measured. But graduation rates can be manipulated. Employment outcomes are a better criterion.
Bio/Vote History
         
Goldin Claudia Goldin Harvard Agree 10
The policies should not be at the college/univ level but should be at the PROGRAM level. Better than nothing, though.
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Agree 4
if done right.
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Did Not Answer
Bio/Vote History
         
Hall Robert Hall Stanford Did Not Answer
Bio/Vote History
         
Holmström Bengt Holmström MIT Did Not Answer
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 7
Conclusion is obvious, but does not support the policy. The proper goal is to improve students' lives on average, not avoid loan losses.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 1
Depends on not forbearing, or picking up costs of past bad private loans. Will the government really put lots of people in debtors prison?
Bio/Vote History
         
Klenow Pete Klenow Stanford Strongly Agree 4
Bio/Vote History
         
Lazear Edward Lazear Stanford Did Not Answer
Bio/Vote History
         
Levin Jonathan Levin Stanford No Opinion
Sounds plausible, but don't know have enough expertise on current program to feel very confident about it.
Bio/Vote History
         
Maskin Eric Maskin Harvard Uncertain 7
May just drive students who were likely to default anyway to different colleges
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley No Opinion
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 4
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Strongly Agree 5
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 6
Much could depend on the nature of the "tie." If this were done well it could also affect competition for students in a positive way.
Bio/Vote History
         
Shin Hyun Song Shin Princeton Disagree 3
Bio/Vote History
         
Stokey Nancy Stokey Chicago No Opinion
Bio/Vote History
         
Thaler Richard Thaler Chicago Uncertain 3
Hard to know without more details. The no brainer is to require better disclosure. You should have asked about that.
Bio/Vote History
         
Udry Christopher Udry Yale Agree 4
Better incentives for colleges seem appropriate here.
Bio/Vote History
         
Zingales Luigi Zingales Chicago Strongly Agree 9
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and are being analyzed for an article to appear in a leading peer-reviewed journal.

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