Financially Overextended: College Attendance as a Contributor to Foreclosures During the Great Recession.

Although subprime mortgage lending and unemployment were largely responsible for the wave of foreclosures during the Great Recession, additional sources of financial risk may have exacerbated the crisis. We hypothesize that many parents sending children to college were financially overextended and v...

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Publicado en:Demography (Springer Nature) Vol. 55; no. 5; pp. 1727 - 1749
Autores principales: Faber, Jacob W., Rich, Peter M.
Formato: journal article
Publicado: Springer Nature Oct2018
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: Financially Overextended: College Attendance as a Contributor to Foreclosures During the Great Recession.
      aug:
        au:
          Faber, Jacob W.
          Rich, Peter M.
        affil:
          Robert F. Wagner School of Public Service, New York University, 295 Lafayette St., 10012, New York, NY, USA
          Department of Policy Analysis and Management, Cornell University, 186 Martha van Rensselaer Hall, 14853, Ithaca, NY, USA
      su:
        United States
        College costs
        Subprime mortgages
        Unemployment
        College attendance
        Foreclosure
        Great Recession, 2008-2013
        Default (Finance)
        Financial risk
      sug:
        subj:
          College costs
          Subprime mortgages
          Unemployment
          United States
          College attendance
          Foreclosure
          Great Recession, 2008-2013
          Default (Finance)
          Financial risk
      keyword:
        College spending
        Great Recession
        Higher education
        Parental investments
        College spending
        Great Recession
        Higher education
        Parental investments
      ab: Although subprime mortgage lending and unemployment were largely responsible for the wave of foreclosures during the Great Recession, additional sources of financial risk may have exacerbated the crisis. We hypothesize that many parents sending children to college were financially overextended and vulnerable to foreclosure as the economy contracted. With commuting zone panel data from 2006 to 2011, we show that increasing rates of college attendance across the income distribution in one year predict a foreclosure rate increase in subsequent years, net of fixed characteristics and changes in employment, refinance debt, house prices, and 19-year-old population size. We find similar evidence of college-related foreclosure risk using longitudinal household data from the Panel Study of Income Dynamics. Our findings uncover a previously overlooked dimension of the foreclosure crisis, and highlight mortgage insecurity as an inadvertent consequence of parental investment in higher education.
      pubtype: Academic Journal
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      src: R
    language: English
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