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Measuring the Effect of Student Loans on College Persistence. Working Paper 27269
- Source :
-
National Bureau of Economic Research . 2020. - Publication Year :
- 2020
-
Abstract
- Governments around the world use grant and loan programs to ease the financial constraints that contribute to socioeconomic gaps in college completion. A growing body of research assesses the impact of grants; less is known about how loan programs affect persistence and degree completion. We use detailed administrative data from Chile to provide rigorous regression-discontinuity-based evidence on the impacts of loan eligibility for university students who retake the national admission test after their first year of studies. Those who score above a certain threshold become eligible for loans covering around 85% of tuition costs for the duration of their program. We find that access to loans increases the fraction who return to university for a second year by 20 percentage points, with two-thirds of the effect arising from a reduction in transfers to vocational colleges and one-third from a decline in the share who stop postsecondary schooling altogether. The longer-run impacts are smaller but remain highly significant, with a 12 percentage point impact on the fraction of marginally eligible retakers who complete a bachelor's degree.
Details
- Language :
- English
- Database :
- ERIC
- Journal :
- National Bureau of Economic Research
- Publication Type :
- Report
- Accession number :
- ED608503
- Document Type :
- Reports - Research