Debt, Default, and Working: Essays on Higher Education Finance
Open AccessThis dissertation contributes to the economics of education and education policy literature pursuing answers to questions about who has access to financial aid, where public expenditures should be directed, and the consequences of financial aid decisions. In the first essay, I provide what I believe to be the first causal estimates of institution-level financial aid funding loss on enrollment and composition of student bodies. I implement a dynamic regression discontinuity design using thresholds from a regulation that restricts eligibility to offer federal financial aid to schools where alumni repay loans at a required rate. Results suggest that financial aid loss discourages enrollment, particularly at for-profit institutions. I find less conclusive evidence that ineligibility to disburse federal financial aid substantially alters student body composition. In the second essay, I describe where students may face discrimination in educational loan markets and discuss available evidence of such practices. I present a number of statistical models that could be used to test for potential discrimination and discuss risks to the validity of such models. In the third essay, I examine the effect of working on grades and credit completion for undergraduate students in the United States and provide some of the first estimates of the effect of working on the academic performance on part-time students. I use student-level fixed effects models to control for permanent hard-to-measure and unobserved characteristics and also analyze the relationship between availability of financial resources, working, and academic performance through an instrumental variables approach. Results indicate that full-time students' grades and credit completion appear to be at most mildly harmed by increasing work hours, but I find little evidence of a detrimental impact of working for part-time students.
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