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Student Aid Reforms in Quebec: Is Changing the Clawback Rate Better than Changing the Base Grant?

Author

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  • Pier-André Bouchard St-Amant
  • Hugo Morin

Abstract

We examine two ways through which student financial aid can be reformed: a cut in the rate at which the aid is clawed back with earned income or an increase in the threshold at which this clawback applies. We present a theoretical and empirical analysis of these options. We show that both reduce incentives to work, although the clawback rate does so less. Cuts to clawbacks also deliver a bigger boost to financial aid for those most in need, although they may benefit students higher in the income distribution. We argue that governments might consider a policy that reduces clawback rates, but within a reasonable range of earned income.

Suggested Citation

  • Pier-André Bouchard St-Amant & Hugo Morin, 2021. "Student Aid Reforms in Quebec: Is Changing the Clawback Rate Better than Changing the Base Grant?," Canadian Public Policy, University of Toronto Press, vol. 47(3), pages 373-398, September.
    • Handle: RePEc:cpp:issued:v:47:y:2021:i:3:p:373-398
    DOI: 10.3138/cpp.2019-073
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