The Role of Institutional and State Aid Policies in Average Student Debt

James Monks

The ANNALS of the American Academy of Political and Social Science, 2014, vol. 655, issue 1, 123-142

Abstract: Rising college student debt levels have received considerable media coverage and have even prompted policy proposals that link rising student debt with tuition inflation. This article examines the role of state aid policies coupled with tuition and financial aid policy and academic outcomes in determining variation in average student debt. A focus solely on tuition as the culprit in rising student debt misses the significant role that state and institutional financial aid policies and student outcomes play in determining debt levels across higher education institutions. Specifically, colleges and universities being need-blind in admissions, meeting-full-need, limiting loans, and graduating students in high paying majors can have a larger impact on student debt levels than can the cost of attendance. Similarly, higher state-provided student aid significantly lowers average student debt at public universities.

Keywords: student debt; higher education finance; educational outcomes (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:655:y:2014:i:1:p:123-142

DOI: 10.1177/0002716214539093

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