Taken for Granted? Effects of Loan-Reduction Initiatives on Student Body Diversity, Borrowing, and Application Behaviors

• In Event: 28.047 - Financial Aid Verification, Nudges, and the Burden of Loans: Understanding Effects

Abstract

Using a difference-in-differences design, this study provides estimates of the impacts of 56 loan-reduction initiatives, such as “no-loan” programs, on a variety of key measures related to the socioeconomic and racial/ethnic diversity of the student body, student loan borrowing, and application behaviors. The results suggest that loan-reduction initiatives reduced the proportion of first-year students borrowing loans at private institutions, but not public institutions. Consistent with prior work, this study finds positive effects of loan-reduction initiative adoption on the enrollment of Pell Grant recipients. Among public institutions, however, preliminary results also indicate negative effects on enrollment of students from underrepresented racial/ethnic minority groups. Additional analyses explore potential variation in outcomes based on the type of initiative implemented.

Authors

• Christopher Bennett, Vanderbilt University

• Brent Joseph Evans, Vanderbilt University

• Christopher Russell Marsicano, Davidson College