Working Paper: NBER ID: w31291
Authors: Sandra E. Black; Lesley J. Turner; Jeffrey T. Denning
Abstract: In 2006, the federal government effectively uncapped student borrowing for graduate programs with the introduction of the Graduate PLUS loan program. Access to additional federal loans increased graduate students’ borrowing and shifted the composition of their loans from private to federal debt. However, the increase in borrowing limits did not improve access to existing programs overall or for underrepresented groups. Nor did access to additional loan aid result in significant increase in constrained students’ persistence or degree receipt. We document that among programs in which a larger share of graduate students had exhausted their annual federal loan eligibility before the policy change—and thus were more exposed to the expansion in access to credit—federal borrowing and prices increased.
Keywords: No keywords provided
JEL Codes: I20; I22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Introduction of Graduate PLUS loan program (H81) | Increased borrowing among graduate students (G51) |
| Increased borrowing among graduate students (G51) | Shifted composition of loans from private to federal sources (H81) |
| Introduction of Graduate PLUS loan program (H81) | No significant effect on overall enrollment in existing graduate programs (I23) |
| Increased borrowing among constrained students (G51) | No significant increases in persistence or degree receipt (I21) |
| Creation of Graduate PLUS loan program (H81) | Significant increases in program prices (P22) |
| Increased federal loans (H81) | Higher program prices (P22) |
| Higher program prices (P22) | No improved access or outcomes for constrained students (I24) |