The Impact of implementing an Income Based Repayment Student Loan Model on Occupational Choices in The United States

This study aimed to address the current student loan crisis. Currently many college graduates face crippling student loans and a wide variety of solutions have been offered to this problem. The main question is what would happen if the United States implemented the English income based repayment model? This model would implement a 9% flat tax on all college graduates for a set time period after graduation and complete forgiveness for lower incomes levels. We used data from the departments of Consumer Finance public use set. Our sample consisted of single people who were employed and had student loans taken out for themselves. This study found significant work disincentive to not having student loans of about $27 dollars per year. We concluded a dead weight loss from implementing an income based repayment model.