Keywords
student credit expansion, tuition pass-through, federal loan caps
Abstract
We study the link between the student credit expansion of the past 15 years and the contemporaneous rise in college tuition. To disentangle simultaneity issues, we analyze the effects of increases in federal student loan caps using detailed student-level financial data. We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar and of about 20 cents on the dollar for unsubsidized federal loans. The effect is most pronounced for more expensive degrees and degrees offered by for-profit and 2-year institutions.
Original Publication Citation
“Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs.” Review of Financial Studies, 2019, Volume 32, Issue 2, Pages 423–466. Lead Article. (Co-authors: David Lucca and Karen Shen).
BYU ScholarsArchive Citation
Lucca, David O.; Nadauld, Taylor; and Shen, Karen, "Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs" (2018). Faculty Publications. 9254.
https://scholarsarchive.byu.edu/facpub/9254
Document Type
Peer-Reviewed Article
Publication Date
2018
Publisher
Review of Financial Studies
Language
English
College
Marriott School of Business
Department
Finance
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