Estimating the Effects of the Texas B-On-Time Loan Program: A Propensity Score Analysis

• In Event: 18.030 - Examining Public Policy in the Lone Star State: Culture, Practice, and Policies

Abstract

Policymakers are grappling with how to redesign loan programs to better protect students against the consequences of borrowing. This paper examines the effects of the B-on-Time (BOT) program, relative to the College Access Loan (CAL) program, both state-administered loan program in Texas on student success. The BOT allows students to obtain a no-interest loan that is forgivable if the student graduates on time with a 3.0 GPA whereas the CAL does not. Employing propensity score matching to analyze student-level data from the Texas Higher Education Coordinating Board, I find that BOT recipients outperformed CAL recipients on graduating from college with a bachelor’s degree, receiving a GPA of 3.0 during college, and earning a higher GPA upon graduating.

Author

• Holly Kosiewicz, Texas Higher Education Coordinating Board