From Subsidies to Loans: The Effects of a National Student Finance Reform on the Choices of Secondary School Students

74 Pages Posted: 4 Sep 2021 Last revised: 19 May 2022

See all articles by Alexandra de Gendre

Alexandra de Gendre

The University of Melbourne, Department of Economics; University of Melbourne - ARC Centre of Excellence for Children and Families over the Life Course; IZA Institute of Labor Economics

Jan Kabatek

University of Melbourne - Melbourne Institute: Applied Economic & Social Research; IZA; Netspar

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Abstract

We analyse the effects of a national student finance reform in the Netherlands, which replaced universal subsidies for higher education students by low-interest loans. We show that this reform had a large impact on education choices of secondary school students, lowering their enrolments in college-preparing tracks and increasing the share of students specializing in STEM subjects. The reform also affected the living arrangements of new college entrants. Our findings highlight that secondary school students respond to the modes of higher education financing well ahead of their graduation, and that financial aid uncertainty alone can deter many from pursuing higher education.

Keywords: financial aid, student finance, higher education, Netherlands, policy uncertainty

JEL Classification: I22, I23, I24

Suggested Citation

de Gendre, Alexandra and Kabatek, Jan, From Subsidies to Loans: The Effects of a National Student Finance Reform on the Choices of Secondary School Students. IZA Discussion Paper No. 14686, Available at SSRN: https://ssrn.com/abstract=3917301

Alexandra De Gendre (Contact Author)

The University of Melbourne, Department of Economics ( email )

Level 4, Faculty of Business and Economics
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Carlton, VIC 3010
Australia

HOME PAGE: http://https://adegendre.com

University of Melbourne - ARC Centre of Excellence for Children and Families over the Life Course ( email )

Level 2, 11 Lancaster Place
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IZA Institute of Labor Economics ( email )

P.O. Box 7240
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Germany

Jan Kabatek

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA ( email )

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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