Student Debt and Higher Education Finance

These flashcards cover key vocabulary and concepts related to student debt and higher education finance.

Student Debt

Debt incurred by students to finance their education, which lacks resale value and depends on labor market outcomes.

Income-driven repayment (IDR)

A repayment plan that ties payments to a borrower's income, with payments decreasing when earnings are low and increasing when they are high.

Payment-to-income mismatch

The issue where fixed loan payments become burdensome for low earners compared to their income.

Public Service Loan Forgiveness

A program that forgives student loans for borrowers who work in public service jobs after making a required number of payments.

Gender pay gap

The difference in earnings between men and women, often influenced by various factors such as field of study and discrimination.

Delinquency

A status of failing to make payments on a debt, which can lead to default.

Consumption smoothing

Financial management strategy aimed at maintaining stable consumption levels despite income fluctuations.

Major choice

The academic discipline a student chooses to study, which can significantly impact their future earnings and career opportunities.

Household constraints

Limitations that affect a household's decision-making, including caregiving responsibilities and financial obligations.

One-time mass forgiveness

A proposal to forgive student loans for a large number of borrowers at once, aimed at providing immediate relief.

Fixed-payment loans

Loans requiring the same payment amount throughout the loan term, regardless of the borrower's income situation.

Risk-sharing

An economic concept where the financial burden of loan repayment is distributed between borrowers and taxpayers.

Career incentives

Factors that motivate individuals to pursue specific job paths, often influenced by financial benefits such as loan forgiveness.