RESEARCH

Abstract. This paper studies how student loan repayment policies can serve as a tool for countercyclical fiscal stabilization. While traditional automatic stabilizers, such as unemployment insurance and progressive income taxation, provide insurance through transfers and taxes, student loan repayment flexibility offers an alternative channel through household debt obligations. By reducing required payments during downturns, either automatically through income-driven repayment (IDR) or discretionarily through payment pauses, the government effectively extends a contingent line of credit to borrowers, providing liquidity to potentially high marginal propensity to consume (MPC) households when they need it most. Using data from the Panel Study of Income Dynamics (PSID) and FRBNY Consumer Credit Panel/Equifax data (CCP), I examine how student debt and repayment flexibility shape household consumption responses to income shocks. I develop a heterogeneous-agent New Keynesian model with student debt and state-contingent repayment obligations to quantify the effects of alternative repayment policies on consumption smoothing, aggregate stabilization, household welfare, and government finances.

Abstract. This paper examines how student loan obligations affect homeownership through mortgage underwriting constraints. We exploit a 2017 Fannie Mae policy change that allowed lenders to use actual student loan payments, rather than a fixed percentage of outstanding balances, in debt-to-income (DTI) calculations. Using FRBNY Consumer Credit Panel/Equifax data (CCP) linked to National Student Clearinghouse (NSC) educational history records, we find that the reform increased homeownership among borrowers enrolled in income-driven repayment (IDR) plans relative to those in standard repayment plans by 0.55 percentage points (2.5% of the control group baseline). We develop a quantitative life-cycle model incorporating student debt, housing decisions, and mortgage constraints to distinguish the income, wealth, liquidity, and underwriting channels through which student debt affects homeownership and to evaluate alternative student loan and housing policies.

Abstract. Trade liberalization can reshape local labor markets by changing the relative demand for skill, with consequences for both migration and human capital investment. Using Brazil's 1990s tariff reforms and the regional exposure measure of Dix-Carneiro and Kovak (2015, 2017), we document that local labor markets more exposed to tariff cuts experienced selective net in-migration of high-school-educated workers and net out-migration of less-educated ones, as well as a rise in both the skill premium and the relative population of skilled workers. We then show that local schooling-supply investment did not respond passively to the shock: growth in local secondary school teachers and enrollment between 1995 and 2010 is concentrated almost exactly in the regions the trade shock exposed least. Where schooling supply did expand, it significantly dampens both the wage-premium and skill-difference responses to the shock. Local education investment thus functions as an endogenous margin of regional adjustment rather than a fixed regional characteristic. We develop an overlapping generations model in which forward-looking agents choose education and location. We then use the model to quantify how trade-induced shifts in local labor demand generate persistent regional divergence in skill composition and heightened spatial inequality and the extent to which endogenous local schooling-supply responses offset that divergence.

Abstract. This paper examines how information and administrative frictions mediate effects of a generous need-based scholarship in Michigan, the Tuition Incentive Program (TIP). TIP covers in-district community college tuition and fees, can be stacked on top of most other financial aid sources (such as the Federal Pell Grant), bases eligibility on categorical participation in Medicaid, does not require annual certification of need, and communicates eligibility early in students’ academic career. Despite these advantageous features, participation in the program remains low. Reduced form-evidence shows null effects on enrollment for barely-eligible students, but a 3 to 4 percentage point increase for students with persistent signs of eligibility. To quantify the role of information, application, and compliance frictions as barriers, we develop and estimate a structural model of college choice and aid application, in which some students are unaware of the program. The model is calibrated to match the estimated reduced-form moments. Simulations show that the effect of TIP is more than doubled when these frictions are removed.  Differences in information and administrative frictions across settings may thus explain some of the variation in financial aid treatment effects documented in the literature.

Abstract.  Understanding how need-based student aid programs interact or "stack" to determine a total aid package is crucial for maximizing financial aid. If students lack this knowledge, when new programs are introduced, they may make changes to their take-up decisions that reduce their total aid receipt. This paper examines whether schools' adoption of last-dollar local student aid programs causes students to substitute away from Michigan's first-dollar Tuition Incentive Program, when doing so can reduce their total aid receipt.  A difference-in-differences approach that leverages the staggered adoption of these local aid programs suggests that TIP take-up decreases by about 15\% among 2-year enrollees and their TIP aid received falls by around \$167 per pupil, or about 20\%. However, differential trends in outcomes before program adoption threatens a causal interpretation of these results. With these caveats in mind, our results suggest that the adoption of last-dollar local programs may have inadvertent consequences for students who misunderstand differences between first- and last-dollar aid programs with the most harm concentrated among the neediest students.

Abstract. The U.S. social safety net comprises a patchwork quilt of welfare programs, but not all eligible beneficiaries receive aid. Incomplete take-up suggests that some individuals and families have unequal burdens in accessing benefits designed to reduce poverty. Using statewide administrative data on six cohorts of Michigan students, we examine incomplete take-up using the case of the state’s largest need-based financial aid program, where eligibility is based on childhood Medicaid participation. We find that economic disadvantage – proxied by duration of childhood on Medicaid – is positively associated with take-up, suggesting that those most in need have highest take-up rates. However, Medicaid enrollment duration reflects both economic need and ability to navigate complex recertification procedures. Our results illustrate how embeddedness (both of individuals within programs and individuals within communities) can help explain patterns of incomplete benefit take-up. Those with consistent safety net attachment – continuous Medicaid enrollment and participation in other programs like food stamps – have higher take-up than those with inconsistent attachment, despite similar need. Additionally, community-level take-up among the network of one’s peers is associated with individual take-up patterns. Understanding which demographic populations can successfully access the safety net has important implications for understanding patterns of stratification, intergenerational mobility, and how institutions shape demographic outcomes over the life course.

Abstract. Social welfare programs, including college financial aid, often only reach a fraction of eligible beneficiaries. We examine this problem through the lens of Michigan’s Tuition Incentive Program (TIP), a state need-based grant aid program. We conduct a large-scale mixed-methods study using data on over one million Michigan public-school students, and 55 interviews with front-line administrators, high school counselors, and financial aid staff. We find that while one third of Michigan high school graduates are eligible for TIP, its take-up rate is only 14 percent, diminishing its impact on college affordability. We identify key barriers that shape take-up: the presence of administrative burdens, and constraints faced by front-line administrators in alleviating these burdens when administrative responsibility is fractured and ill-defined. 

• EPI Policy Brief: Michigan’s Tuition Incentive Program: An Initial Look at Take-up (with Kathy Michelmore, Nathan Sotherland, Kevin Stange, and Marissa Thompson). 2025.

• EPI Policy Brief: The Effectiveness of Need-Based Financial Aid: Evidence from Michigan's Tuition Incentive Program (with Nicole Wagner Lam, Katherine Michelmore, Nathan Sotherland, Kevin Stange, Nelson Oviedo, Margaret Peterman and Marissa Thompson). 2026.