Financial aid uncertainty and low-income students’ higher education preferences

Gloria L. Bernal*, Luz K. Abadía, Luis E. Álvarez-Arango, Kristof De Witte

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Low-income students’ preferences for higher education might depend on the uncertainty of financial aid. Using a time discontinuity design, this paper exploits the unanticipated cancellation of a nationwide Colombian merit and need-based scholarship, called Ser Pilo Paga, to study its consequences on students’ preferences for higher education. Preferences are measured using a discrete choice experiment administrated to 949 low-income high school students in 2018. The findings reveal that the scholarship’s cancellation reduced higher education ambitions among low-income students due to the decreased interest in both financial aid and high-quality universities. The effects were particularly concentrated on income-eligible individuals who were more likely to obtain the scholarship, as their choices for financial aid and high-quality institutions declined by 15 to 50% of the baseline preference.
Original languageEnglish
Pages (from-to)1845-1863
Number of pages19
JournalHigher Education
Volume87
Issue number6
Early online date1 Sept 2023
DOIs
Publication statusPublished - Jun 2024

JEL classifications

  • d82 - "Asymmetric and Private Information; Mechanism Design"
  • i22 - Educational Finance
  • i24 - Education and Inequality

Keywords

  • Higher education
  • Discrete choice experiment
  • Financial aid
  • Prior-college preferences
  • Ser Pilo Paga
  • D82
  • I22
  • I24
  • AFFIRMATIVE-ACTION
  • COLLEGE
  • IMPACT
  • ASPIRATIONS
  • COLOMBIA

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