Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment

Journal Article (Academic article)

Using data from a Canadian field experiment on financial barriers to higher education, we estimate the distribution of the value of financial aid for prospective students. We find that a considerable share of prospective students perceive significant credit constraints. Most individuals are willing to pay a sizable interest premium above the prevailing market rate for the option to take up a loan, with a median interest rate wedge equal to 6.8 percentage points for a $1,000 loan. The willingness to pay for financial aid is heterogeneous across students, with discount factors playing a key role in accounting for this variation.

Full Text

Duke Authors

Cited Authors

  • Belzil, C; Maurel, A; Sidibé, M

Published Date

  • February 19, 2021

Published In

Volume / Issue

  • 39 / 2

Published By

International Standard Serial Number (ISSN)

  • 0734-306X

Digital Object Identifier (DOI)

  • 10.1086/710701