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In this study, I investigate whether removing financial barriers to college attendance sufficiently reduces socioeconomic disparities in higher education preparation and enrollment. Using Chile's nationwide free college tuition policy (Gratuidad), which offers unconditional tuition-free higher education to students from the poorest 60% of households, I document persistent gaps in non-financial factors such as academic preparation, student effort, and parental expectations for maximum level of education.
Employing comprehensive population-level longitudinal administrative data covering multiple cohorts of Chilean students (2002 - 2024), I first show that large socioeconomic gaps in academic performance (measured by GPA and standardized test scores) and attendance emerge early in students' school trajectories and intensify during the transition to high school. Lower-income students disproportionately experience declines in academic performance and attendance precisely when cumulative academic preparation becomes critical for college readiness.
Leveraging the staggered rollout of the Gratuidad policy, I then apply a difference-in-differences approach to estimate its causal impact on parental expectations, student effort, and academic readiness. Results reveal a significant positive shift in parental expectations for eligible students (a five percentage point increase), indicating that free tuition reshapes parental beliefs about their children's future educational attainment. However, this expectation increase does not translate into observable improvements in students' academic effort, as proxied by attendance or GPA. Therefore, while reducing tuition expenses alleviates critical financial constraints and raises families' aspirations, it may not alone foster the behaviors and academic engagement necessary for students' successful transition into higher education.
All data used in this research are publicly available or can be requested through Chile's transparency law.