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From Subsidies to Loans: The Effects of a National Student Finance Reform on the Choices of Secondary School Students

Author

Listed:
  • de Gendre, Alexandra

    (University of Melbourne)

  • Kabátek, Jan

    (University of Melbourne)

Abstract

We analyse the effects of a national student finance reform in the Netherlands, which replaced universal subsidies for higher education students by low-interest loans. We show that this reform had a large impact on education choices of secondary school students, lowering their enrolments in college-preparing tracks and increasing the share of students specializing in STEM subjects. The reform also affected the living arrangements of new college entrants. Our findings highlight that secondary school students respond to the modes of higher education financing well ahead of their graduation, and that financial aid uncertainty alone can deter many from pursuing higher education.

Suggested Citation

  • de Gendre, Alexandra & Kabátek, Jan, 2021. "From Subsidies to Loans: The Effects of a National Student Finance Reform on the Choices of Secondary School Students," IZA Discussion Papers 14686, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14686
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    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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