IDEAS home Printed from
   My bibliography  Save this paper

Loan Aversion among Canadian High School Students


  • Cathleen Johnson
  • Claude Montmarquette


Evidence is presented on whether the willingness to borrow for education varies significantly among some at-risk students: low SES levels, First Nations, and first generation students. 1248 students participated in a survey, a numeracy assessment and took part in experimental decisions. During these sessions, students were presented with a series of paid binary decisions: bursaries vs. cash, loans for postsecondary education studies vs. cash, intertemporal decisions and risky decisions. The paid binary decisions involved trade-offs between cash and various types of student financial aid, allowing us to generate a cost per dollar of educational financing (grants, loans, mixtures of loans and grants). Prices for the various types of educational financing overlapped substantially in order to more clearly distinguish the impact of loan aversion on the decision to take up financial assistance to pursue PSE. Results show that several factors influence the subjects' decisions about education financing but the most prominent influence was the price of educational subsidies. Participants were marginally sensitive to the form of financing (grant or loan), with no evidence of systematic loan aversion being detected. Cette étude montre que la volonté d'emprunter pour s'instruire varie considérablement chez certains étudiants issus de milieu socio-économique faible, des Premières nations, et les étudiants de première génération. 1248 étudiants ont participé à une enquête, une évaluation de leur niveau de connaissances numériques et ont pris part à des décisions expérimentales. Pendant ces séances, les étudiants ont été confrontés à une série de décisions binaires rémunérées : bourses vs dollars, prêts d'études pour le postsecondaire vs dollars, des décisions intertemporelles et des décisions risquées. Les décisions binaires rémunérées impliquant un arbitrage entre des dollars et divers types d'aide financière, nous ont permis de générer un coût par dollar du financement de l'éducation (bourses, prêts, mélanges de prêts et de bourses). Les prix pour les différents types de financement de l'éducation se chevauchent de manière substantielle pour permettre de distinguer clairement l'impact de l'aversion pour les prêts sur la décision de prendre ou non l'option d'une aide financière pour poursuivre des études postsecondaires. Les résultats montrent que plusieurs facteurs influencent les décisions des sujets sur le financement de leur éducation, mais l'influence la plus importante est le prix en dollars des subventions à l'éducation. Les participants ont été légèrement influencés par la forme de financement (subvention ou prêt), mais aucune preuve d'aversion pour les prêts n'a été décelée.

Suggested Citation

  • Cathleen Johnson & Claude Montmarquette, 2011. "Loan Aversion among Canadian High School Students," CIRANO Working Papers 2011s-67, CIRANO.
  • Handle: RePEc:cir:cirwor:2011s-67

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
    2. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
    3. Dupuy, Richard & Mayer, Francine & Morissette, Rene, 2000. "Rural Youth: Stayers, Leavers and Return Migrants," Analytical Studies Branch Research Paper Series 2000152e, Statistics Canada, Analytical Studies Branch.
    4. Corak, Miles & Lipps, Garth & Zhao, John, 2003. "Family Income and Participation in Post-secondary Education," Analytical Studies Branch Research Paper Series 2003210e, Statistics Canada, Analytical Studies Branch.
    5. Claude Montmarquette & Nathalie Viennot-Briot & Marcel Dagenais, 2007. "Dropout, School Performance, and Working while in School," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 752-760, November.
    6. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
    7. Catherine C. Eckel & Philip J. Grossman, 2008. "Forecasting Risk Attitudes: An Experimental Study Using Actual and Forecast Gamble Choices," Monash Economics Working Papers archive-01, Monash University, Department of Economics.
    8. Dearden, Lorraine & McGranahan, Leslie & Sianesi, Barbara, 2004. "The role of credit constraints in educational choices: evidence from NCDS and BCS70," LSE Research Online Documents on Economics 19447, London School of Economics and Political Science, LSE Library.
    9. Frenette, Marc, 2007. "Est-ce que les universites profitent a la population locale de jeunes? Resultats provenant de la frequentation des universites et des colleges, et des gains des diplomes suivant la creation d'une nouv," Direction des etudes analytiques : documents de recherche 2006283f, Statistics Canada, Direction des etudes analytiques.
    10. Catherine Eckel & Cathleen Johnson & Claude Montmarquette, 2002. "Will the Working Poor Invest in Human Capital? A Laboratory Experiment," CIRANO Project Reports 2002rp-08, CIRANO.
    11. Frenette, Marc, 2007. "Why Are Youth from Lower-income Families Less Likely to Attend University? Evidence from Academic Abilities, Parental Influences, and Financial Constraints," Analytical Studies Branch Research Paper Series 2007295e, Statistics Canada, Analytical Studies Branch.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Intertemporal choice; field experiments; risk attitudes; loans aversion; choix intertemporels; expériences sur le terrain; attitudes vis-à-vis des risques; l'aversion aux prêts d'études.;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2011s-67. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.