IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Is Debt Relief as Good as Liquidity? The Impact of Prospective Student Debt on Post-Secondary Attendance among Low-Income Youth

  • Frenette, Marc

In this study, I estimate the impact of offering two large non-refundable grants to low-income Canadian youth on postsecondary attendance. The grants had two interesting features. First, they were clawed back from loans, thus reducing costs but providing no additional liquidity. Second, the grants were only available to students if parental income was below a fixed threshold. This sharp discontinuity in the offer of the grants provides for near ideal conditions to study their causal impact, closely mimicking random assignment. Despite the large size of the grants (up to $6,000 or $7,000), the fact that students were automatically assessed for the grants with their regular student loans application, and evidence that most Canadian youth are at least aware of non-refundable study grant opportunities, I find that the grants had no impact on postsecondary or university attendance. Some policy implications are discussed.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no%20%2076%20-%20Frenette.pdf
Download Restriction: no

Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2011-7.

as
in new window

Length: 43 pages
Date of creation: 29 Mar 2011
Date of revision: 29 Mar 2011
Handle: RePEc:ubc:clssrn:clsrn_admin-2011-7
Contact details of provider: Web page: http://www.clsrn.econ.ubc.ca/

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Helena Skyt Nielsen & Torben Sørensen & Christopher R. Taber, 2008. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," NBER Working Papers 14535, National Bureau of Economic Research, Inc.
  2. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc.
  3. Frenette, Marc, 2009. "Do universities benefit local youth? Evidence from the creation of new universities," Economics of Education Review, Elsevier, vol. 28(3), pages 318-328, June.
  4. Rothstein, Jesse & Rouse, Cecilia Elena, 2011. "Constrained after college: Student loans and early-career occupational choices," Journal of Public Economics, Elsevier, vol. 95(1), pages 149-163.
  5. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post-Secondary Schooling," NBER Working Papers 9055, National Bureau of Economic Research, Inc.
  6. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," NBER Working Papers 13527, National Bureau of Economic Research, Inc.
  7. Marc Frenette, 2006. "Too Far to Go On? Distance to School and University Participation," Education Economics, Taylor & Francis Journals, vol. 14(1), pages 31-58.
  8. David M. Linsenmeier & Harvey S. Rosen & Cecilia Elena Rouse, 2002. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," NBER Working Papers 9228, National Bureau of Economic Research, Inc.
  9. Austin Nichols, 2007. "Causal inference with observational data," Stata Journal, StataCorp LP, vol. 7(4), pages 507-541, December.
  10. Buddelmeyer, Hielke & Skoufias, Emmanuel, 2004. "An evaluation of the performance of regression discontinuity design on PROGRESA," Policy Research Working Paper Series 3386, The World Bank.
  11. Hans J. Baumgartner & Viktor Steiner, 2004. "Enrolment into Higher Education and Changes in Repayment Obligations of Student Aid: Microeconometric Evidence for Germany," Discussion Papers of DIW Berlin 444, DIW Berlin, German Institute for Economic Research.
  12. Lemieux, Thomas & Milligan, Kevin, 2008. "Incentive effects of social assistance: A regression discontinuity approach," Journal of Econometrics, Elsevier, vol. 142(2), pages 807-828, February.
  13. Thomas J. Kane, 1995. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?," NBER Working Papers 5164, National Bureau of Economic Research, Inc.
  14. Susan Dynarski, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," NBER Working Papers 7756, National Bureau of Economic Research, Inc.
  15. Erica Field, 2009. "Educational Debt Burden and Career Choice: Evidence from a Financial Aid Experiment at NYU Law School," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 1-21, January.
  16. Neill, Christine, 2009. "The Effect of Student Loan Limits on University Enrolments," CLSSRN working papers clsrn_admin-2009-11, Vancouver School of Economics, revised 02 Feb 2009.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ubc:clssrn:clsrn_admin-2011-7. 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: (Vivian Tran)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.