 Student loans, spending, and parental transfers: Insights from a nudge in student loan policy in the NetherlandsJim Been and Marike Knoef Economics of Education Review, 2023, vol. 96, issue C Abstract: This paper investigates the effect of student loans on students’ (financial) behavior. For causal identification, we exploit quasi-experimental evidence using a nudge in the take-up of student loans in higher education in the Netherlands. We estimate an instrumental variable (IV) model with a first-stage Difference-in-Differences design. We find that a decline in the default student loan reduced monthly student borrowing by 141 euros. A one-euro decline in student loans reduced students’ expenditures by 61 cents, but also led to a substantial increase of parental financial contributions (43 cents). Especially expenditures on leisure activities were affected. There is no evidence for increased labor earnings among students, on average. Self-reported indicators of academic performance do not worsen in response to the reform; students’ GPA even improves. Keywords: Student loans; Quasi-experiment; Parental transfers; Consumption; Academic performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecoedu:v:96:y:2023:i:c:s0272775723001048 DOI: 10.1016/j.econedurev.2023.102457 Access Statistics for this article Economics of Education Review is currently edited by E. Cohn More articles in Economics of Education Review from Elsevier |
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