Understanding the drivers of student loan decision-making and its impact on graduation rates in Ghanaian public universities

Abstract

ABSTRACT Higher education in countries like Ghana faces significant challenges, including financial barriers, which usually hinder students’ educational progress and graduation rates. While some students usually rely on family support and personal savings, these resources are generally insufficient for covering all educational expenses. Although student loans have emerged as a beacon of hope to address these challenges, research on this topic, particularly in developing countries, has remained underexplored. This study, grounded in the Theory of Planned Behaviour, investigates the psychological factors influencing Ghanaian students’ decisions to utilize student loans and the impact on graduation rates. Data is gathered from 114 Ghanaian students using a purposive sampling technique. The analysis reveals a positive correlation between favourable attitudes toward student loans and intentions to use them. Subjective norms significantly influence loan decisions, while perceived behavioural control has no significant impact. Also, loan decisions positively correlate with graduation rates, suggesting loans can enhance academic persistence. These findings highlight the need for responsible loan programs to improve graduation outcomes and socioeconomic development.