Rising College Tuition and its Effects on College Finance: New Evidence from the National Longitudinal Survey of Youth 1997
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Publisher:The Ohio State University
Series/Report no.:The Ohio State University. Department of Economics Honors Theses; 2021
To study students' borrowing behaviors in response to the rising tuition, we construct an OLS regression model to analyze the state tuition effect on multiple college finance approaches. Using the National Longitudinal Survey of Youth 1997 (NLSY97), its Geocode, and the state-level average tuition costs from the National Center for Education Statistics (NCES), we fix the age of the respondents at 17 and match them with the tuition costs based on their birth cohorts and state of residence. The employment of the state-level tuition at the age before college entry eliminates the endogeneity problem of self-reported tuition costs. Our results show that as the tuition rises, students receive higher grants and scholarships, and amass more debts from the government and family or friends. Specifically, on average, with a 1 dollar increase in the average annual in-state tuition costs for 4-year public institutions, a student receives 0.666 dollar more in grants or scholarships, an extra 0.347 dollar in government loans and 0.128 dollar in loans from family or friends cumulatively.
Academic Major: Economics
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