Taken for Granted? Effects of Loan-Reduction Initiatives on Student Borrowing, Admission Metrics, and Campus Diversity

Abstract

In recent decades, several dozen colleges and universities have instituted loan-reduction initiatives (LRIs), such as "no-loan" programs. Institutions frequently cast such initiatives as efforts to increase socioeconomic diversity on campus. Using a difference-indifferences analytic strategy with national institution-level data, we examine the effect of LRI adoption at 54 institutions on three sets of outcomes: student borrowing, admission metrics, and campus diversity. Our analysis suggests LRIs decreased institution-level borrowing rates at private institutions, with no detected change at public institutions. Consistent with stated program goals, LRI adoption increased the number of Pell Grant recipients at both public and private institutions. However, adopting LRIs at public institutions reduced racial/ ethnic diversity, suggesting possible trade-offs for LRI adoption in terms of student body diversity.

The Shape of the Sieve: Which Components of the Admissions Application Matter Most in Particular Institutional Contexts?

“…Next, we added measures of an institution's enrollment funnel and practices: (1) percentage of applicants admitted, which approximates institutional prestige; (2) count of applications, which measures the volume an admissions office processed (logged); and (3) a binary variable indicating whether an institution used a no-loan program, which accounts for the possibility that larger scale changes to admissions or aid practices might be associated with particular sieves. We gathered data on no-loan programs from Bennett, Evans, and Marsicano (2021) and institutional websites.…”

Untested Admissions: Examining Changes in Application Behaviors and Student Demographics Under Test-Optional Policies

“…These policies assure some or all students that they will either receive no student loans in their financial aid package or receive no loans above a specified amount. Prior research has shown that such policies can result in slight increases in the enrollment of students from low-income backgrounds at private institutions (Bennett et al, 2020;Hillman, 2013), although such findings are not universal (Rosinger et al, 2018). Since there is overlap in the time periods during which institutions adopted test-optional policies and the establishment of ''no-loan'' and ''loan cap'' policies, it is valuable to control for adoption of such initiatives.…”

“…Since there is overlap in the time periods during which institutions adopted test-optional policies and the establishment of ''no-loan'' and ''loan cap'' policies, it is valuable to control for adoption of such initiatives. The listing of ''no-loan'' and ''loan cap'' institutions and their enactment year comes from Bennett et al (2020).…”