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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.

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The Department of Education, Skills and Employment is making a series of improvements to streamline the [[vocational education and training] VET student loans] VSL program and optimise the user experience. These changes will make it easier for students to access a loan, and for providers to become an approved VSL provider and meet their ongoing obligations under the program. This work reflects that while the program has been operating successfully for over five years there is always room for improvement. Multiple program reviews, stakeholder feedback and operational experience have identified areas for program improvement, without compromising on the strong integrity measures that form the backbone of the program. A key part of redesign will be making it easier and potentially less costly for providers to participate in the program. The department has considered input from providers in previous consultations and is now looking to build on that to implement incremental program improvement.

The objectives of the VSL redesign project are to: (1) improve the user experience, both for students and providers; (2) optimize program utilisation; (3) increase program performance by improving processes and removing inefficiencies and unnecessary complexity; (4) maintain program integrity and student protections and the effective management of risk; and (5) support VSL reform and any future expansion. The department are seeking the views of providers to the issues set out in this paper to help develop and refine redesign proposals and inform future consultation activities.

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We analyse the effects of a national student finance reform in the Netherlands, which replaced universal subsidies for higher education students by low-interest loans. We show that this reform had a large impact on education choices of secondary school students, lowering their enrolments in college-preparing tracks and increasing the share of students specializing in STEM subjects. The reform also affected the living arrangements of new college entrants. Our findings highlight that secondary school students respond to the modes of higher education financing well ahead of their graduation, and that financial aid uncertainty alone can deter many from pursuing higher education.

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To estimate causal effects of college choice, we exploit eligibility rules for student loans in a regression discontinuity design. Loan programs induce students to pursue college degrees that are more expensive and prolonged relative to technical education. Although higher education is profitable, the marginal return of college is identical to that of technical education when students are about 30 years old. The college premium seems to increase over time, possibly offsetting the initial experience gap and covering cost differences under moderate discount rates. We study the effects of debt burden on college choice using a similar cutoff rule for scholarships.

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To understand and design student loan systems, it is important to have appropriate earnings and/or income projections for current and future graduates. In this paper, we use Current Population Survey (CPS) data from the US to demonstrate empirical approaches that can be used to simulate lifetime income and earnings profiles that are needed to both understand and design effective and sustainable student loan systems. The crucial element in getting this analysis right, is having reliable simulations of the whole distribution of current and/or future graduate earnings or income. We show that the traditional way of using unconditional quantile regression (UQR) is not always correct for evaluating student loans and conditional quantile regression (CQR) with appropriate age smoothing is a more reliable approach. We show that this approach can be used even in countries where income is censored and recorded in income groups. We then show a simple way of introducing dynamics into income projections even when individuals only have access to very short panel data. This involves using copula functions drawing on earlier work by Dearden et. al (2009) and Bonhomme and Robin (2009). Having reliable dynamic estimates turns out to be important in assessing not only the taxpayer costs of designing an ICL (as has already been shown in Dearden et. al (2009) and Higgins and Sinning (2013)) but for correctly assessing the extent of loan repayment hardship for individuals.

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Nearly 50 years ago, the federal government committed itself to removing the financial barriers that prevent low-income students from enrolling in and completing colleges. For years, colleges complemented the government's efforts by using their financial aid resources to open the doors to the neediest students. But those days appear to be in the past. With their relentless pursuit of prestige and revenue, the nation's public and private four-year colleges and universities are now in danger of shutting down what has long been a pathway to the middle class for low-income and working-class students. [This report] presents a new analysis of little-examined US Department of Education data showing the 'net price' - the amount students pay after all grant aid has been exhausted - for low-income students at thousands of individual colleges. The analysis shows that hundreds of public and private non-profit colleges expect the neediest students to pay an amount that is equal to or even more than their families' yearly earnings. As a result, these students are left with little choice but to take on heavy debt loads or engage in activities that reduce their likelihood of earning their degrees, such as working full-time while enrolled or dropping out until they can afford to return.

The analysis finds that the financial hurdles are highest in the private non-profit college sector, where only a few dozen exclusive colleges meet the full financial need of the low-income students they enroll. Nearly two-thirds of the private institutions analyzed charge students from the lowest-income families, those making 30,000 dollars or less annually, a net price of over 15,000 dollars a year. While the problem is not as extreme among public universities, it is rapidly getting worse. As more states cut funding for their higher education systems, public colleges are increasingly adopting the enrollment management tactics of their private college counterparts - to the detriment of low-income and working-class students alike. Overall, too many four-year colleges, both public and private, are failing to help the government achieve its college access mission. They are instead using their financial resources to fiercely compete for the students they most desire: the 'best and brightest' students - and the wealthiest. The time has come for policymakers to take notice. Federal action is needed to ensure that colleges continue to provide a gateway to opportunity, rather than perpetuating inequality by limiting college access to only those who are rich enough to be able to afford it.

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Although a wealth of research has shown that financial aid reduces hurdles to college enrollment, much less is known about how students react to the common occurrence of losing aid midway through their college careers. Using longitudinal data on two cohorts of Tennessee public college students and regression discontinuity designs centered around merit-based [helping outstanding pupils educationally] HOPE scholarship renewal benchmarks, [the authors] find that losing one's scholarship results in a small degree of detachment from college and a rise in earnings of about 14 cents per dollar of lost aid. [The authors] see no local impact, however, on timely degree completion, which implies that HOPE loss may have merely accelerated a small number of students' migration out of college. It remains to be seen how students fare farther below the renewal threshold, or whether they are better off for having had the HOPE scholarship at all, albeit for a short time.

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Changes in financial aid policies raise questions about students being asked to pay too much for college and whether parents' college savings for their children helps reduce the burden on students to pay for college. Using trivariate probit analysis with predicted probabilities, in this exploratory study we find recent changes in the financial aid system place a higher responsibility on African American, Latino/Hispanic, and moderate-income students to pay for college themselves. We also find when parents open a savings account, start a state-sponsored savings plan, or open a college investment fund students are less likely to pay for college with student contributions. Therefore, we suggest in addition to grants and scholarships, policies that encourage accumulation of savings for college among minority and lower income families may help reduce the college cost burden they experience.

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This practice brief uses data to illustrate that student veterans not only enhance campus diversity and enrich academic discourse, but also perform well in the classroom, arrive on campus with ample financial support, and remain engaged members of the community after graduation. The brief also outlines key practices, along with institutional examples, for senior leaders looking to build support for student veteran enrollment: (1) Define commitments and integrate them into a comprehensive strategy for diversity; (2) Identify and charge key stakeholders to champion and enact strategy; (3) Engage faculty, staff, students, and alumni to garner buy-in; and (4) Communicate explicit commitments to prospective student veterans.

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[This report] examined the main features of the student loans scheme in the Republic of Korea. Included are its historical development, current conditions, objectives, organizational and administrative structure, financial sustainability, etc. [The authors] discussed issues about equity in the performance of the loans schemes, presenting the survey results from the student recipients and university and bank staff in charge of the loans programmes. Based on the review of the student loans scheme, [the authors] can reach the conclusion that the Korean student loans scheme has been financially sound with low administrative costs and default rate and with a well-developed banking system. Moreover, the burden of repayments for students is tolerable.

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