Graduation Incentives Through Conditional Student Loan Forgiveness

Ulla Hämäläinen, Kristian Koerselman and Roope Uusitalo
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Ulla Hämäläinen: Ministry of Finance, Finland

No 11142, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We evaluate a Finnish student financing reform which created substantial financial incentives for on-time graduation, and had the side effect of turning expected nominal interest rates on student loans strongly negative. We find that both the timing of graduation and the take-up of loans remained unaffected by the reform. This is consistent with earlier findings in the literature that students do not seem to process financial incentives well when framed as a loan.

Keywords: incentives; student finance; higher education; pace of studies; student loans (search for similar items in EconPapers)
JEL-codes: I22 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017-11
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (1)

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Working Paper: Graduation Incentives Through Conditional Student Loan Forgiveness (2017)
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