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Title Student loans: liquidity constraint and higher education in South Africa
Full text http://ahero.uwc.ac.za/index.php?module=cshe&action=viewtitle&id=cshe_796
Date 2011
Author(s) Gurgand, Marc; Lorenceau, Adrien; Mélonio, Thomas
Abstract Empirical evidence that access to higher education is constrained by credit availability is limited and usually indirect. This paper provides direct evidence by comparing university enrollment rates of South African potential students, depending on whether they get a loan or not to cover their registration fees, in a context where such fees are high. We use matched individual data from both a credit institution (Eduloan) and the Department of Education. Based on a regression discontinuity design using the fact that loans are granted according to a credit score threshold, we can estimate the causal impact of loan obtainment. We find that the credit constraint is substantial, as it decreases the enrollment rate into higher education by more than 20 percentage points in a population of student loan applicants.
Subject(s) Student Loans, Student Loan Schemes, Student Financial Aid, Student Fees, South Africa
Coverage Finance and Physical Resources
Language English
Type of publication Paper (Not Peer Reviewed)
Format Pdf
Repository Cape Town - AHERO, University of Western Cape
Added to C-A: 2013-12-06;15:17:56