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Enrolment into Higher Education and Changes in Repayment Obligations of Student Aid: Microeconometric Evidence for Germany

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  • Hans J. Baumgartner
  • Viktor Steiner

Abstract

We evaluate the effect of the federal students' financial assistance scheme (BAfoeG) on enrolment rates into higher education by exploiting the exogenous variation introduced through a discrete shift in the repayment regulations. Supported students had to repay the full loan until 1990. Thereafter, 50 percent of the student aid has been offered as a non-repayable grant. Our results from simple difference-in-difference estimates suggest that student aid is ineffective in raising enrolment rates. Our findings may have important implications for the current debate on the reform of financing higher education in Germany and elsewhere.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.42514.de/dp444.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 444.

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Length: 25 p.
Date of creation: 2004
Date of revision:
Handle: RePEc:diw:diwwpp:dp444

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Keywords: Educational decision; Educational finance; Higher education; Difference-in-difference; Discrete-choice;

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Cited by:
  1. Hans J. Baumgartner & Viktor Steiner, 2006. "Does More Generous Student Aid Increase Enrolment Rates into Higher Education?: Evaluating the German Student Aid Reform of 2001," Discussion Papers of DIW Berlin 563, DIW Berlin, German Institute for Economic Research.
  2. Frenette, Marc, 2011. "Is Debt Relief as Good as Liquidity? The Impact of Prospective Student Debt on Post-Secondary Attendance among Low-Income Youth," CLSSRN working papers clsrn_admin-2011-7, Vancouver School of Economics, revised 29 Mar 2011.

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