NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Effect of Credit Constraints on the College Drop-Out Decision A Direct Approach Using a New Panel Study

Todd R. Stinebrickner, Ralph Stinebrickner

NBER Working Paper No. 13340
Issued in August 2007
NBER Program(s):   ED

A serious difficulty in determining the importance of credit constraints in education arises because standard data sources do not provide a direct way of identifying which students are credit constrained. This has forced researchers to adopt a variety of indirect approaches. This paper differentiates itself from previous work by taking a direct approach for providing evidence about this issue which is made possible by unique longitudinal data that have been collected specifically for this type of purpose. Our results suggest that, while credit constraints likely play an important role in the drop-out decisions of some students, the large majority of attrition of students from low income families should be primarily attributed to reasons other than credit constraints.

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Document Object Identifier (DOI): 10.3386/w13340

Published: Ralph Stinebrickner & Todd Stinebrickner, 2008. "The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study," American Economic Review, American Economic Association, vol. 98(5), pages 2163-84, December. citation courtesy of

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