Financial Aid for Higher Education: Scholarships versus Loans

Alonso Bucarey

How to make college affordable or tuition free has been at the center of the higher education debate in many countries. A usual concern about these policies is how much they effectively change enrollment rates and how much of their subsidies are just a transfer to students who would enroll even without them? Additionally, how much are financial aid effects attenuated by colleges’ capacity constraints? I propose to study these questions using rich micro-level data from Chile. First, I estimate the effect of scholarship eligibility on enrollment using a Sharp Regression Discontinuity Design (SRDD) that exploits the threshold crossing eligibility rule. Then, I build a structural demand model to estimate the preferences of students over programs and evaluate the effectiveness of alternative financial aid policies.

About Alonso Bucarey

Alonso Bucarey is a doctoral candidate in the Department of Economics at MIT. His primary research interests are in the economics of education and labor economics. His current research combines empirical strategies from labor economics and industrial organization to better understand the role fo financial aid in higher education as a way to foster enrollment. Bucarey holds a B.A. and M.S. in Economics at Universidad de Chile.