The lack of loan aversion among Canadian high school students

Cathleen Johnson and Claude Montmarquette

Canadian Journal of Economics, 2015, vol. 48, issue 2, 585-611

Abstract: Evidence is presented on the factors that influence take-up for postsecondary education financing (loans or grants) for high school students. Results show several factors influence the students' decisions about taking loans or grants but the most prominent influence was the price of educational subsidy. A total of 1,248 high school students across Canada participated. Prices for the grants and loans overlapped substantially in order to more clearly distinguish the impact of loan aversion on the decision to take up financial assistance to pursue PSE. The study featured paid experimental decisions (ranging from $25 to $700 in cash and from $500 to $4,000 in education financing), a numeracy assessment, a student survey and a parental telephone survey. The targeted sample included at-risk high school students: low SES levels, First Nations and first generation students. Participants were marginally sensitive to the form of financing (grant or loan), with no evidence of systematic loan aversion being detected.

JEL-codes: C93 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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