The Effect of Changes in the Composition of Financial Aid on College Enrollments

Elizabeth Savoca
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Elizabeth Savoca: Smith College

Eastern Economic Journal, 1991, vol. 17, issue 1, 109-121

Abstract: This paper examines whether the shift in the composition of financial aid away from grants toward loans adversely affected college enrollments in the 1970s and 1980s. Multinomial logit estimates of individual college choice behavior show that the probability of attending college falls when loans replace grants, dollar-for-dollar, in the financial aid package. The estimates, however, also imply that this effect is small. Simulations of aggregate enrollment rates suggest that the increase in the proportion of aid comprised of loans provided only a minor negative inducement to enroll between 1972 and 1985.

JEL-codes: I22 (search for similar items in EconPapers)
Date: 1991
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:17:y:1991:i:1:p:109-121

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