Full Citation

Title: The Effects of College Loans and Subsidies on College Attendance and Later Life Outcomes

Citation Type: Miscellaneous

Publication Year: 2015

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: I estimate the effects of college loan and subsidy eligibility on college attendance and later life outcomes. I use seven datasets and a Fixed Effects Instrumental Variables approach based on large policy changes in Guaranteed Student Loans, Pell Grants, and Social Security Student Benefits. I find that unsubsidized loan eligibility shifted attendance towards four-year colleges and private colleges, but did not increase overall college attendance or later life earnings. I find a significant effect of subsidy eligibility on college attendance, a smaller significant effect on eventual college completion, but no effect on later life earnings, job satisfaction, or well-being. I also do not find any evidence of external benefits, such as reduced criminal behavior or increased civic engagement. Using a sufficient statistic approach as well as a direct approach, I conclude that the subsidy programs did not increase social welfare. Overall, these results suggest that college credit constraints explain very little of the variation in college attainment and later life outcomes.

Url: https://aefpweb.org/sites/default/files/webform/aefp40/Ramsey - Effects of Fin Aid - 021215.pdf

User Submitted?: No

Authors: Ramsey, Daniel

Publisher: University of Chicago

Data Collections: IPUMS CPS

Topics: Education, Other

Countries: