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Long-term effects of grants and loans for vocational education

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  • Aguirre, Josefa

Abstract

In this paper I study the long-term effect of giving low-income, low-performing students access to state grants and loans for vocational schools. I combine 12 years of administrative records on higher education enrollment and graduation in Chile and exploit the fact that access to state grants for 2-year vocational programs and state loans for 2-year and 4-year vocational programs are both a discontinuous function of a student’s GPA. Both grants and loans increase a student’s probability of ever enrolling in higher education, as well as the number of years that students spend enrolled. Although imprecise, results show a positive effect on graduation. Findings indicate that financial aid can increase degree completion, even when targeted to low-performing students attending vocational education.

Suggested Citation

  • Aguirre, Josefa, 2021. "Long-term effects of grants and loans for vocational education," Journal of Public Economics, Elsevier, vol. 204(C).
    • Handle: RePEc:eee:pubeco:v:204:y:2021:i:c:s0047272721001754
    DOI: 10.1016/j.jpubeco.2021.104539
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