{"title":"Student Loan Debt Response to Tuition Changes","authors":"Zachary Jacob Dowdy, Tennecia Dacass","doi":"10.1177/05694345231192981","DOIUrl":null,"url":null,"abstract":"Amid rising concerns regarding student loan debt, we examine the effect of Washington State’s College Affordability Program introduced in 2015 on undergraduate student loan debt to provide policy-makers with additional tools to help prevent another student loan debt crisis. The program reduced tuition for resident full-time undergraduate students at public colleges and universities for two consecutive academic years. This policy adoption created a natural experiment that we exploit to identify a causal link between tuition and loans. Using college-level data for the 2009–2010 through 2021–2022 academic years and employing a difference-in-differences model in conjunction with nearest-neighbor matching, we show that a decrease in college tuition following the adoption of the College Affordability Program caused a $637.96 (9 percentage-point) decline in average loans among first-time, full-time undergraduates in Washington State relative to undergraduates from matched U.S. schools. JEL Codes: G28, I22","PeriodicalId":85623,"journal":{"name":"The American economist","volume":" ","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2023-08-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"The American economist","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/05694345231192981","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
Amid rising concerns regarding student loan debt, we examine the effect of Washington State’s College Affordability Program introduced in 2015 on undergraduate student loan debt to provide policy-makers with additional tools to help prevent another student loan debt crisis. The program reduced tuition for resident full-time undergraduate students at public colleges and universities for two consecutive academic years. This policy adoption created a natural experiment that we exploit to identify a causal link between tuition and loans. Using college-level data for the 2009–2010 through 2021–2022 academic years and employing a difference-in-differences model in conjunction with nearest-neighbor matching, we show that a decrease in college tuition following the adoption of the College Affordability Program caused a $637.96 (9 percentage-point) decline in average loans among first-time, full-time undergraduates in Washington State relative to undergraduates from matched U.S. schools. JEL Codes: G28, I22
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