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The effects of need‐based financial aid on educational decisions and outcomes: Evidence from Canada

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  • Qian Liu

Abstract

Using administrative data from Canada, this paper presents new evidence on the causal effects of a large‐scale need‐based financial aid program on undergraduate students' educational decisions and outcomes, including the understudied institution and major choices. The program results in a significant difference in the composition of aid—students below the income thresholds receive more grants than loans compared to those above the threshold. Employing a regression discontinuity design, we find little evidence that grant eligibility influences students' initial choice of institution or major, persistence, major switching or degree completion. Les effets de l'aide financière en fonction des besoins sur les décisions et les résultats en matière d'éducation : données probantes du Canada. Cet article utilise des données administratives du Canada pour présenter de nouvelles preuves sur les effets causaux d'un programme à grande échelle d'aide financière en fonction des besoins sur les décisions et les résultats scolaires des étudiants de premier cycle, notamment en ce qui concerne le choix de l'établissement d'enseignement et de la majeure. Le programme se traduit par une différence notable dans la composition de l'aide : les étudiants sous le seuil de revenus reçoivent davantage de bourses que de prêts par rapport à ceux qui sont au‐dessus du seuil. À l'aide d'un modèle de régression sur discontinuité, nous trouvons peu de preuves que l'admissibilité à des bourses influence le choix initial de l'établissement ou de la majeure, la persévérance, le changement de majeure ou l'obtention du diplôme.

Suggested Citation

  • Qian Liu, 2025. "The effects of need‐based financial aid on educational decisions and outcomes: Evidence from Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 58(4), pages 1470-1518, November.
    • Handle: RePEc:wly:canjec:v:58:y:2025:i:4:p:1470-1518
    DOI: 10.1111/caje.70034
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    References listed on IDEAS

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