Title
The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study
Document Type
Working Paper
Publication Date
2007
Abstract
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 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 from the Berea Panel Study. The results from our study of Berea College students 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.
