Student loans: Credit constraints and higher education in South Africa

Marc Gurgand, Thomas Melonio and Adrien Lorenceau
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Adrien Lorenceau: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: The empirical evidence that enrollment in higher education is constrained by access to credit is limited and usually indirect. We use a regression discontinuity design based on the fact that student loans are granted according to a score threshold at a South African credit institution (Eduloan) providing short-term loans at market conditions: we find that the credit constraint is substantial, as it reduces enrollment by more than 40 percentage points in a population of mostly middle-class applicants. However, this effect is entirely concentrated on women, and women granted a loan catch up with men's enrollment levels. This heterogeneity is not explained by lower incomes in the sample of women. It implies that women have lower access to credit, or that their options for managing without a credit are more limited than men's.

Keywords: Higher education; Student loans; Credit constraint; South Africa (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-fdg
Note: View the original document on HAL open archive server: https://hal.science/hal-03903733v1
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Published in Journal of Development Economics, 2023, 161, ⟨10.1016/j.jdeveco.2022.103031⟩

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Journal Article: Student loans: Credit constraints and higher education in South Africa (2023)
Working Paper: Student loans: Credit constraints and higher education in South Africa (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03903733

DOI: 10.1016/j.jdeveco.2022.103031

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