Early impacts of college aid

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Early Impacts of College Aid ABSTRACT Early Impacts of College Aid *We analyze the impact of an expansion in government-guaranteed credit for higher education in Chile on a sample of elementary and high school students. Using students who had an alternative source of funding as a control group, and administrative records before and after the reform, we present evidence that students most likely to attend college in a future are affected in different ways. First, we show that parents of students who ex ante were more likely to be credit restricted became more likely after the reform to state that their child would end up completing college. Second, we find that relaxing credit restrictions reduces the probability of dropping out of high school, specifically among top students originally enrolled in low-performance schools and low-performance students attending better schools. Third, we find that the reform led to an increase in educational sorting. Best students switch to better schools while low-performance students go to lower-ranked schools. This sorting helps to explain why we observe a decrease (increase) in GPA and an increase (decrease) in grade repetition among better (worse) students. Then, for a sample of students that were in transition from elementary to secondary school, we show that good students are more likely to enroll in a college-oriented track. Finally, using household data and birth records aggregated at the municipal level, we find, consistent with previous findings, a reduction in teen pregnancy.JEL Classification: I28, J13

Educational Inequality

“…Studies by Kaufmann (2014), Solis (2017), andCáceres-Delpiano, Giolito, andCastillo (2018) on Mexico and Chile further suggest that credit constraints are more important in middle-income countries. Specifically, financial constraints are likely to be binding for a larger share of families, and private financial markets for funding education investment are less developed.…”

Implications of losing a need- and merit-based scholarship on the educational trajectory: a curricular analytics approach

“…Students know these requirements when applying for the scholarship, but universities also reinforce this message through their student services offices. There are other public scholarships that can be used by students who are enrolled at the university where this study was conducted, but all of them only partially cover tuition (Cáceres-Delpiano et al, 2018), and students use them in combination with government loans as the main funding mechanism.…”

“…CRUCH university students mainly have access to two loan types: The Solidary Fund of University Loans (Fondo Solidario de Crédito Universitario, hereinafter FSCU) and Government Guaranteed Loans (Crédito con Aval del Estado, hereinafter CAE) (Cáceres- Delpiano et al, 2018). The FSCU was created in 1994 and is managed by the government; its loan interest rate is 2%, and loan payments depend on income.…”

Inequality and Dropout in Higher Education in Colombia. A Multilevel Analysis of Regional Differences, Institutions, and Field of Study

“…Some authors have studied the relationship of financial aid with the phenomenon of desertion. In effect, the implementation of financing programs encourages good students and those from better schools, whose parents have restricted access to credits, to complete their university studies in the Chilean context [25]. In the same country, another study highlighted that persistence decisions are also associated with financial aid, mainly grants and loans, especially among lower-income students attending technical institutions.…”