Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/224112 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 2019:8
Publisher: 
Uppsala University, Department of Economics, Uppsala
Abstract: 
Most governments around the world offer student loans to help disadvantaged students to enroll in college to reduce the attainment gap between rich and poor. However, we know little about the consequences of these loans. The reduction of the gap depends not only on initial enrollment but also on the dropout rate before graduation. This paper shows how the availability of loans affects the dropout rate in college. Two programs in Chile assign loans based on a cutoff in the national college admission test, enabling a regression discontinuity design. The analysis uses on students who were not induced by the loan to enroll in the first year. I show that access to loans reduces the dropout rate by 25 percentage points and is highly persistent over time (up to the fifth year after initial enrollment). At the cutoff, access to loans allows eliminating the differences in the dropout rate by family income. Finally, I find that students are not sensitive to tuition costs when loans are available.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
890.73 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.