Abstract
AbstractThe effect of credit constraints on university outcomes is studied. Credit constraints have a negative relationship with dropout, especially on lower achieving high school graduates. Credit constrained students with strong high school achievement are 13–15% more (less) likely to graduate (be slow finishers) relative to otherwise similar students who are potentially or unlikely constrained. Using competing risk analysis, we find dropout is most likely in the first year of study and falls over time for all students. After 3 years of study, the risk of dropout increases for students who are constrained suggesting constraints may eventually bind on these students.
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