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Student Aid, Repayment Obligations and Enrolment in Higher Education in Germany - Evidence from a "Natural Experiment"
Baumgartner, Hans J. | Steiner, Viktor
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 125 (2005), Iss. 1 : pp. 29–38
9 Citations (CrossRef)
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Baumgartner, Hans J.
Steiner, Viktor
Cited By
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Abstract
We evaluate the effect of the German Federal Educational Assistance Act (BAfoeG) on enrolment rates in higher education by exploiting the exogenous variation introduced through a discrete shift in the repayment regulations. Supported students had to repay the full loan until 1990. Thereafter, 50 percent of the student aid has been offered as a non-repayable grant. Our results from simple difference-in-difference estimates suggest that student aid is ineffective in raising enrolment rates. Our findings may have important implications for the current debate on the reform of financing higher education in Germany and elsewhere.