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Title: College Cost, Borrowing Constraints and the Timing of College Entry
Resulting in 1 citation.
1. Kane, Thomas J.
College Cost, Borrowing Constraints and the Timing of College Entry
Eastern Economic Journal 22,2 (Spring 1996): 181-194.
Also: http://www.jstor.org/pss/40325703
Cohort(s): NLSY79
Publisher: Palgrave Macmillan Journals
Keyword(s): College Education; Cost-Benefit Studies; Human Capital; Racial Differences; Savings; Tuition

Permission to reprint the abstract has not been received from the publisher.

Many youth, for whom college may be a worthwhile investment, have insufficient collateral with which to secure a loan. Indeed, this is the purpose of the Guaranteed Student Loan program. However, borrowing under the GSL program (now called Stafford Loans) is subject to a maximum, which can be binding, particularly during the first 2 years at college. Unfortunately, the size and importance of these borrowing constraints, which fell in real value throughout much of the 1980s, remain untested. A simple model of human capital investment predicts that youth would enter college immediately after high school in the absence of borrowing constraints. In the presence of borrowing constraints, students may choose to work first and save for college. Therefore, as a test of the presence of borrowing constraints, the relationships between public tuition levels and age of college entry is evaluated using the National Longitudinal Survey of Youth and the October Current Population Survey. The evidence suggests that borrowing constraints may bind, since delayed college entry is more common in high tuition states, particularly among blacks and low-income whites. Copyright Eastern Economic Association 1996. Fulltext online. Photocopy available from ABI/INFORM.
Bibliography Citation
Kane, Thomas J. "College Cost, Borrowing Constraints and the Timing of College Entry." Eastern Economic Journal 22,2 (Spring 1996): 181-194.