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Do Academically Struggling Students Benefit From Continued Student Loan Access? Evidence From University and Beyond

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posted on 2022-09-14, 04:39 authored by Yu-Wei ChuYu-Wei Chu, Harold E Cuffe
Abstract 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 re-enrollment 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 both small relative to the earnings returns and declines quickly due to faster repayment.

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Preferred citation

Chu, Y. -W. L. & Cuffe, H. E. (2021). Do Academically Struggling Students Benefit From Continued Student Loan Access? Evidence From University and Beyond. The Review of Economics and Statistics, 1-45. https://doi.org/10.1162/rest_a_01144

Journal title

The Review of Economics and Statistics

Publication date

2021-12-20

Pagination

1-45

Publisher

MIT Press - Journals

Publication status

Published online

Online publication date

2021-12-20

ISSN

0034-6535

eISSN

1530-9142

Language

en

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