This fellowship is given to the student with the best second-year research paper, as determined by a faculty vote. Beth’s paper, titled “The Impact of Student Debt on Homeownership,” explores whether the recent increase in student debt really plays a factor in the recent decline in first-time homeownership rates, as many in the media have claimed. She had to overcome the fact that individual-level student loan data is unavailable, but through a clever empirical strategy based on HOPE scholarships determined that student debt does not cause lower homeownership rates.
The impact of student loans on future outcomes is hotly debated, but the empirical literature is small. This paper attempts to estimate the impact of student loans on future homeownership. Using micro-level data from the American Community Survey, I exploit lottery scholarship availability as a proxy for exogenous variation in student loan uptake. A difference-in-difference estimator is used to compare Tennessee cohorts when lottery scholarship funds were available with previous Tennessee cohorts (when such funds were not available) and corresponding North Carolina cohorts. Results do not indicate student loans have any significant impact on future homeownership behaviors.
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