Do Academically Struggling Students Benefit from Continued Student Loan Access? Evidence from University and Beyond
Open accessAbstract
We estimate the effects of student loan access on educational attainment and labor market returns in New Zealand. We exploit the introduction of a national policy mandating a 50% pass rate for student loan renewals using a regression discontinuity design. Retaining loan access increases reenrollment for students around the threshold, and a majority eventually graduate with a bachelor's degree within seven years. We find that retaining student loan access leads to large labor market returns for struggling students. The additional debt from further borrowing is small relative to the earnings returns and declines quickly due to faster repayment.
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Cites
The Long-Run Impacts of Financial Aid: Evidence from California’s Cal Grant
Bettinger, E., Gurantz, O., Kawano, L., Sacerdote, B., & Stevens, M. (2019) · American Economic Journal: Economic Policy · doi:10.1257/pol.20170466 · Cited by 110 · see citing works
Student Loans and Homeownership
Mezza, A., Ringo, D., Sherlund, S., & Sommer, K. (2020) · Journal of Labor Economics · doi:10.1086/704609 · Cited by 110 · see citing works
Black, S., Denning, J., Dettling, L., Goodman, S., & Turner, L. (2020) · doi:10.3386/w27658 · Cited by 48 · see citing works
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College Costs, Financial Aid, and Student Decisions
Dynarski, S., Page, L., & Scott-Clayton, J. (2022) · National Bureau of Economic Research · doi:10.3386/w30275 · Cited by 56 · see citing works
- Authors
- Chu, Y.-W. L., & Cuffe, H. E.
- Affiliations
- Victoria University of Wellington (NZ)
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press
- Published
- 2024-01
- Volume
- 106
- Issue
- 1
- Pages
- 68-84
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W4200427884
- Cited by
- 8
- References
- 3
- Citations by year
- 2025: 1 · 2024: 2 · 2023: 2 · 2022: 2 · 2019: 1
- FWCI
- 2.64
- Type
- journal article
- Language
- en
- Open access
- green
- figshare.com
- Licence
- cc-by-nc-nd
- Locations
- The Review of Economics and Statistics (publishedVersion)
- Figshare (submittedVersion, cc-by-nc-nd)
- Victoria University of Wellington
- Topics
- Social Sciences › Education › Higher Education Research Studies
- Social Sciences › Education › School Choice and Performance
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Keywords
- student loans, academic underachievement, educational attainment, labor market returns, student debt, graduate earnings, student loan repayment
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