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Optimism about Graduation and College Financial Aid

Emily Moschini et al.

American Economic Journal: Macroeconomics2026https://doi.org/10.1257/mac.20230303article
AJG 4ABDC A*
Weight
0.50

Abstract

In the United States, college dropout risk is sizable. We provide new empirical evidence that beliefs about the likelihood of earning a bachelor's degree predict college enrollment, and that the distribution of these beliefs exhibits widespread optimism. We incorporate this distribution of beliefs into an overlapping generations model with college as a risky investment that can be financed via federal loans, grants, family transfers, or earnings. We then examine the welfare impact of access to federal student loans. We find that access can reduce welfare for young adults who are low-skilled, poor, and optimistic, due to their mistaken beliefs. (JEL E61, E71, I22, I26, G51)

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https://doi.org/https://doi.org/10.1257/mac.20230303

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@article{emily2026,
  title        = {{Optimism about Graduation and College Financial Aid}},
  author       = {Emily Moschini et al.},
  journal      = {American Economic Journal: Macroeconomics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1257/mac.20230303},
}

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Optimism about Graduation and College Financial Aid

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.