Where Do Students Go When For-Profit Colleges Lose Federal Aid?

Stephanie R. Cellini, Rajeev Darolia and Lesley Turner

American Economic Journal: Economic Policy, 2020, vol. 12, issue 2, 46-83

Abstract: We examine the effects of federal sanctions imposed on for-profit institutions in the 1990s. Using county-level variation in the timing and magnitude of sanctions linked to student loan default rates, we estimate that sanctioned for-profits experience a 68 percent decrease in annual enrollment following sanction receipt. Enrollment losses due to for-profit sanctions are 60–70 percent offset by increased enrollment within local community colleges, where students are less likely to default on federal student loans. Conversely, for-profit sanctions decrease enrollment in local unsanctioned for-profit competitors, likely due to improved information about local options and reputational spillovers. Overall, market enrollment declines by 2 percent.

JEL-codes: H52 I21 I22 I23 I28 (search for similar items in EconPapers)
Date: 2020
References: View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: WHERE DO STUDENTS GO WHEN FOR-PROFIT COLLEGES LOSE FEDERAL AID? (2017)
Working Paper: Where Do Students Go when For-Profit Colleges Lose Federal Aid? (2016)
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DOI: 10.1257/pol.20180265

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