The Incidence of Student Loan Subsidies: Evidence from the PLUS Program

• 成果类型: Article
• 署名作者: Kargar, Mahyar; Mann, William
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Emory University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac031
• 发表日期: 2023
• 页码: 1621
• 关键词: Tuition; MARKET; education

摘要

How much do students benefit from student loan subsidies? We investigate this question, exploiting a natural experiment: a demand shock due to the 2011 tightening of credit standards in the PLUS program. We first establish that the Bennett hypothesis is best explained by colleges charging large markups over their marginal costs, rather than by advantageous selection. Then we use our results to estimate that students plausibly capture less than 60 cents of each dollar of resources expended on loan subsidies. We discuss alternative approaches that would more directly benefit students.