Literature Review #3

 Visual:

 Katerina Nikalexi | VOX, CEPR Policy PortalConstantine Yannelis | The University of Chicago Booth School of Business

There are the two authors, Katerina Nikalexi and Constantine Yannelis


Citation:

Nikalexi, Katerina, et al. “How to Lower Student Loan Defaults: Simplify Enrollment in Income-Driven Repayment Plans.” Manhattan Institute for Policy Research, Manhattan Institute for Policy Research, 1 Dec. 2019. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=eric&AN=ED604377&site=ehost-live.


Summary: 

The authors are explaining how there are other options that students can take to reduce their college loans, but these options are not widely known or applied, like they are in other countries. There are many income-driven repayment plans that can help students reduce monthly payments. 


Authors:

One of the authors, Katerina Nikalexi, is currently getting her PhD at the London Business School, and has also had job experience working at the European Central Bank. This makes her very knowledgable n how to handle money, and specially debt. The other author, Constantine Yannelis, is an assistant professor of Finance at the University of Chicago, also making him knowledgable on money and how to handle it. 

        

        Key Terms: 

        - "income driven": in this context, this phrase means that the amount that borrowers would have to pay back is dependent on their incomes.

        - "low-cost policy change": this is referring to the changes that could be made, not costly, which can help borrowers have an easier time with repaying their loans.

        - "optimal student credit arrangements": this is the best strategy for how a student should pay back their loans, and means what their best option is. 


        Three Quotes:

        - "few [students] take advantage of a federal program that would make them more affordable" (Nikalexi&Yannelis 1).

        - "Despite the advantages of the IDR, fewer than 30% of all student borrowers were enrolled as of 2018" (Nikalexi&Yannelis 1). 

        - "The program is underutilized because the paper application process is unnecessarily complex" (Nikalexi&Yannelis 1). 


        Value

        This article gives value to my paper by showing me the other options for repaying student loans that I can analyze. It gives a good option for student to use to reduce debt, yet explains why many students do not utilize this tool and how it is a problem with the system of government. 

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