Category(s):
Education and Training,
Social Policy
Status: Active
Principal: Herbert Emery
Project Number: P0119
Year Approved: 2023
The Province of NB continues to invest significant funding in NB’s public postsecondary education system both directly to the institutions and indirectly in the form of financial support for students. As retention of young and skilled individuals is central to the government of New Brunswick’s strategy for growing the economy, an important policy question is the extent to which government investment in PSE via the provision of financial aid to students is affecting a student’s likelihood of successful completion of their studies, their decision on what to study, and their decision on whether to stay in NB after graduation. The study will be examining the outcomes and impact of government provision of financial aid to students in these dimensions.
Carneiro et al (2002) showed that restricted access to loans or credit constraints were only short-term hindrances to post-secondary education since the decision to enroll is made long before the period right before enrollment when these credit constraints are experienced. That is, a lack of access to loans was found not to constrain the decision to apply for post-secondary education. While the decision to enroll in some form of PSE was found not to be affected, these results may not generalize to the NB experience. Furthermore, shocks may still affect other PSE decisions such as field of study and PSE completion. It is important to understand to what extent financial aid can be used to influence these PSE decisions.
McElroy (2005) examined how PSE completion changed for different students depending on the type of financial aid received i.e., grants, loans, a mix of both, and no financial aid in Canada. The study found that students who received any form of financial aid had higher probabilities of completing their studies and had completed higher percentages of the required credits earned.
Research also found that those who borrowed to access PSE are likely to drop out due to unmet financial needs while those who did not initially borrow money to access PSE cited other reasons for dropping out of PSE. Financial barriers clearly have an influence on the drop-out decisions of some borrowers for whom loans, and other sources of income were insufficient to meet the student’s expenses. This is likely becoming an even greater challenge as tuition increases outpace the broader inflation rate. Hence, financial assistance may act as a required boost for students to encourage PSE completion or may be an indicator of possibly dropping out of PSE.
The study will examine the extent to which students who receive financial assistance are likely to complete PSE and if they are retained in the province after completion of PSE. We are also interested in knowing the demographic and economic characteristics of those who receive financial assistance and remain in NB. We will also examine what role the program of study enrolled in plays in the decision to apply for financial assistance.
Hence, the influence of financial assistance on PSE outcomes will be examined in this study to evaluate government financial assistance as a viable means of encouraging PSE completion and retention of PSE completers in New Brunswick.
References:
Carneiro, Pablo, and James J. Heckman. 2002. “The Evidence on Credit Constraints in Post-Secondary Schooling,” The Economic Journal 112, 705-34
McElroy, Lori. 2005. “Student Aid and University Persistence — Does Debt Matter?”, The Canada Millennium Scholarship Foundation.
